ᐅ How to Best Approach a Project Involving an Existing House When Using Own Equity
Created on: 9 Oct 2022 10:33
A
AJAM_2022
Hello everyone,
I need some fundamental advice on how to approach our planned project, as we are currently a bit overwhelmed with where to start.
Starting point:
Existing house owned by my parents-in-law.
Valued at €680,000 (approximately $730,000) four years ago.
Major renovation completed in 2018.
Debt-free.
The plan is to build a single-family house plus an extension for my parents-in-law.
My wife and I have a monthly net income of about €9,000 (approximately $9,700).
We are debt-free and have saved around €100,000 (approximately $108,000).
One question:
What is the best way to determine the budget for the new build?
The existing house will be used as “equity.”
Ideally, we would sell it beforehand to know exactly how much we will get.
However, that may be difficult timing-wise, as the buyer probably won’t want to wait until our new house is completed.
If we arrange bridge financing and sell the existing house later, it is uncertain how much we will actually get for it.
Especially in the current market, no one knows where real estate prices are headed.
We look forward to an engaging discussion.
Sunny Sunday greetings
I need some fundamental advice on how to approach our planned project, as we are currently a bit overwhelmed with where to start.
Starting point:
Existing house owned by my parents-in-law.
Valued at €680,000 (approximately $730,000) four years ago.
Major renovation completed in 2018.
Debt-free.
The plan is to build a single-family house plus an extension for my parents-in-law.
My wife and I have a monthly net income of about €9,000 (approximately $9,700).
We are debt-free and have saved around €100,000 (approximately $108,000).
One question:
What is the best way to determine the budget for the new build?
The existing house will be used as “equity.”
Ideally, we would sell it beforehand to know exactly how much we will get.
However, that may be difficult timing-wise, as the buyer probably won’t want to wait until our new house is completed.
If we arrange bridge financing and sell the existing house later, it is uncertain how much we will actually get for it.
Especially in the current market, no one knows where real estate prices are headed.
We look forward to an engaging discussion.
Sunny Sunday greetings
With us, the payment was made first, and the transfer of ownership took place upon handover.
That was a bit unusual.
The clause regarding compensation for use and the handover date was not part of our agreement. I specifically asked about it, and they said they had never heard of it. Well, it doesn't matter now, everything is finished anyway.
That was a bit unusual.
The clause regarding compensation for use and the handover date was not part of our agreement. I specifically asked about it, and they said they had never heard of it. Well, it doesn't matter now, everything is finished anyway.
kati1337 schrieb:
Well, it doesn’t really matter now, the whole thing is done and dusted.Otherwise, I could have provided you with a clause from our contract about that 😀 😀 🙂
k-man2021 schrieb:
Is that really your experience, or was it meant ironically? Do buyers usually like to wait after paying the purchase price until moving in?They certainly don’t like to wait, but when someone finds their dream property, they usually accept it!
k-man2021 schrieb:
Is that really your experience, or was that meant ironically? Do buyers often wait to move in long after the purchase price has been paid?
We are currently facing the same questions as @AJAM_2022 … That was exactly our experience back then. We bought the apartment in February 2019. We took possession one year later, in February 2020. It was contractually agreed before a notary that the money would only be transferred upon handover of the apartment. A specific time window for the handover was fixed in writing.
Why did we gladly wait the year? This gave us plenty of time to calmly organize the furniture and contractors needed for the move. Since everything was very well planned by then, we were able to terminate our rental agreement accordingly.
W
WilderSueden10 Oct 2022 12:53I think it really depends on the situation. Is it urgent, is it your absolute dream home, or just a house? What alternatives are you considering? After all, even in a new build, you can typically move in at best about a year after purchasing the plot, usually later.
At the very beginning, we viewed an apartment where the previous owner wanted to move out only after six months. That would have been acceptable, but it did bother me a little.
At the very beginning, we viewed an apartment where the previous owner wanted to move out only after six months. That would have been acceptable, but it did bother me a little.
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