ᐅ Signing a construction contract before financing is secured?
Created on: 18 Feb 2016 11:24
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borderpuschlB
borderpuschl18 Feb 2016 11:24Hello dear building experts,
After a long decision-making process, we have now chosen a house and a company. Since we would like to start this year, we should sign the construction contract relatively quickly.
Now my question is, how did you handle this?
1.) We cannot finalize the financing yet because we have no confirmation of the KfW efficiency rating we will receive.
2.) The energy consultant only calculates after the contract is signed (which is understandable, as they won’t invest time without security).
How was it for you? I would like to have the assurance that the financing will work before signing. We have roughly calculated everything with very similar figures, but I feel a bit uncertain about taking such a step.
Many thanks in advance for your helpful answers.
After a long decision-making process, we have now chosen a house and a company. Since we would like to start this year, we should sign the construction contract relatively quickly.
Now my question is, how did you handle this?
1.) We cannot finalize the financing yet because we have no confirmation of the KfW efficiency rating we will receive.
2.) The energy consultant only calculates after the contract is signed (which is understandable, as they won’t invest time without security).
How was it for you? I would like to have the assurance that the financing will work before signing. We have roughly calculated everything with very similar figures, but I feel a bit uncertain about taking such a step.
Many thanks in advance for your helpful answers.
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nordanney18 Feb 2016 11:32Do I understand correctly that you are buying a house without even knowing what kind of house it will be?
I would throw the construction contract in the trash and choose another provider. What if the house doesn’t even meet the energy saving regulations and you have to spend tens of thousands more?
I would throw the construction contract in the trash and choose another provider. What if the house doesn’t even meet the energy saving regulations and you have to spend tens of thousands more?
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borderpuschl18 Feb 2016 11:51The building envelope definitely meets KfW 70 standards. Whether we achieve KfW 55 depends on the chosen heating system, and additional insulation might be necessary (especially in the basement). The exact calculation will only be done after signing. Is this unusual?
Hi,
please take a look at the thread
https://www.hausbau-forum.de/threads/kfw-55-in-teilbeheiztem-Keller-kaltkeller.14659/page-3#post-119507
(I hope links are allowed in this forum...)
If you want a KFW XXX house, it _MUST_ be clearly stated in the contract. And it must be worded so that the general contractor (GC) is obliged to deliver it at the agreed price. Otherwise, you open the door to additional costs. The GC could otherwise offer the absolute minimum insulation and you would end up paying the full upgrade cost from KFW 70 (which is the lowest standard they can offer) to KFW 55 or 40.
Whether the general additional cost for KFW 55 or 40 is worthwhile is another question.
Best regards,
Andreas
please take a look at the thread
https://www.hausbau-forum.de/threads/kfw-55-in-teilbeheiztem-Keller-kaltkeller.14659/page-3#post-119507
(I hope links are allowed in this forum...)
If you want a KFW XXX house, it _MUST_ be clearly stated in the contract. And it must be worded so that the general contractor (GC) is obliged to deliver it at the agreed price. Otherwise, you open the door to additional costs. The GC could otherwise offer the absolute minimum insulation and you would end up paying the full upgrade cost from KFW 70 (which is the lowest standard they can offer) to KFW 55 or 40.
Whether the general additional cost for KFW 55 or 40 is worthwhile is another question.
Best regards,
Andreas
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Doc.Schnaggls18 Feb 2016 12:50Hello,
In our contract for work, the chosen KfW efficiency level and the corresponding house price were also clearly specified.
Since, in my opinion, this is a very important aspect of a house building project, it should be clearly settled in advance.
Another option would be to include a withdrawal clause in the contract for work, in case you do not secure financing for the project.
However, I strongly doubt that your provider will agree to a cost-neutral exit in the contract if they cannot even tell you the KfW rating before signing the contract.
Regards,
Dirk
In our contract for work, the chosen KfW efficiency level and the corresponding house price were also clearly specified.
Since, in my opinion, this is a very important aspect of a house building project, it should be clearly settled in advance.
Another option would be to include a withdrawal clause in the contract for work, in case you do not secure financing for the project.
However, I strongly doubt that your provider will agree to a cost-neutral exit in the contract if they cannot even tell you the KfW rating before signing the contract.
Regards,
Dirk