ᐅ Procedures Followed by Banks When Purchasing an Existing Property

I hope this topic fits within the forum; if not, the thread can be closed quickly.

Some of you may already know that we are planning to sell our current house to finance our new home. I have recently received some information from potential buyers that I find difficult to evaluate, and I’m surprised that banks apparently have such a strong influence on the purchase of an existing property.

Supposedly, the bank wants…

…a calculation of the living/usable area
…a detailed floor plan with measurements of all levels, cross-section drawings
…a visit from a bank employee or an appraiser (I’m not sure which)

The calculation of the living/usable area and the detailed floor plans of all levels are not allowed to be done by ourselves; this must be done by a professional company.

…Furthermore, the bank of one interested party, without having seen the house or being informed about renovations/refurbishments, without any information on equipment or features, estimated our house to be worth “xyz” euros.

Are you familiar with this as well? This “interference” by the bank in the contract negotiations or the requirements for the seller to provide documents to the bank are completely new to me. I only know it this way (as is the case with my husband and me): you disclose your salaries, income, savings accounts, insurances, etc., and then you either get the loan or you don’t. When we bought our house, we informed the lending bank about our salaries, and that was it. Which house we bought, with which square meters and rooms, was never of interest to them.

Thanks in advance for your replies.

Yes, banks require all these documents, and site inspections or appraisals are also quite common. I can’t tell you exactly how professional, for example, a floor plan needs to be. Don’t you have the documents at home yourselves?

Pinky0301 schrieb:

... Don’t you have the documents at home yourself?

No, we don’t. When we bought the house, we didn’t receive such documents either, and as mentioned, our bank didn’t require to see them.

Thanks for your information. So basically, it means that the buyer doesn’t actually decide whether they are allowed to buy a specific house, but rather the bank or the appraiser does, or am I misunderstanding this? Therefore, we cannot rely on a prospective buyer’s purchase confirmation, is that correct?

I have also heard that banks want to know every detail about a property and even conduct inspections. Other banks do not require this.

Pinkiponk schrieb:

So we cannot rely on a potential buyer's purchase commitment, is that correct?

Yes, unfortunately.

Pinkiponk schrieb:

Apparently, the bank wants ...
... calculation of the living/usable area
... dimensioned floor plans of all levels, section drawings
... a visit from a bank employee or an appraiser (I don’t remember exactly)
The calculation of the living/usable area and the dimensioned floor plans of all levels must not be done by oneself, it should be done by a company.

These are the standard documents that you should also have yourself. They are all available in the building file.

Pinkiponk schrieb:

Furthermore, one bank of an interested buyer, without having seen the house or being informed about the renovations/refurbishments, without any information about the features, valued our house at "xyz" euros.

That is also normal, it’s a rough loan valuation.

Pinkiponk schrieb:

Do you know this as well? This “interference” by the bank in the contract negotiations or the requirement for the seller to provide documents for the bank is completely unfamiliar to me.

It’s a completely normal procedure. The bank MUST check the property and creditworthiness.

Pinkiponk schrieb:

So basically, the interested buyer does not get to decide whether they are allowed to buy a particular house, but the bank or the appraiser does, or am I misunderstanding this? So we can’t rely on a purchase commitment from an interested buyer, is that correct?

Yes, that’s exactly how it works. At least indirectly, since the buyer can only purchase if they have the money – equity or loan funding. If the banks say “no,” they simply can’t buy. It’s always like that; if you don’t have money in your account, you can’t spend it. Whether it’s a house, kitchen, car, or vacation.

Pinkiponk schrieb:

So we can’t rely on a purchase commitment from an interested buyer, is that correct?

You can rely on their interest. Whether the buyer can actually proceed depends on the financing confirmation from the bank.

Overall, the procedure as you described it is completely normal and nothing out of the ordinary.

You can also calculate the living area yourself.
Floor plans are necessary, that’s a given.
Get hold of the building file.