ᐅ What tasks need to be completed before signing the shell construction contract?
Created on: 5 Sep 2017 08:09
Z
Zaba12
Hello everyone,
From a financial planning perspective, I’ve been giving some thought to a few things and would like to hear your opinions.
Basic information:
1. The plot of land from the municipality (fully serviced) is financed and will be paid off by the end of the year. The municipality still needs to complete the servicing and carry out the land survey (paid by the municipality).
2. The architect has completed the design planning.
3. The initial phase is planned as an extended shell construction (i.e., groundwork, drainage, shell construction, roof).
4. After that, known contractors will handle the interior finishing.
Items 1-2 will be paid out of pocket. Items 3-4 will be covered by the house financing, which should be finalized at the beginning of January. Logically, there are a few items between steps 2 and 3.
In my view, the following points are those that would make the house financing ready for disbursement (so that the shell builder can start construction). I hope my assumptions are correct, since without house financing ready for disbursement, the shell construction cannot even begin ;-) .
- Building survey, 1000€
- Building permit via exemption, 1000€
- Additional payment for floor area, 300€
- Second notary fees (new land registry fees due to house financing), 2500€ (essential for the loan in my opinion, because without land registration for the financing bank, there is no money)
- Builder’s liability insurance, paid
- Construction all-risk insurance / builders’ risk insurance, 400€
- Soil report, 1000€
- Energy consultation (probably not the full amount in the first step), 3500€
- Provision of construction electricity/water, 700€
Based on my estimate, I would be looking at around 10,000–11,000€ to pay out of pocket before the next invoices can be paid through the house financing, is that correct?
Are there any points missing, or are my estimates too low?
From a financial planning perspective, I’ve been giving some thought to a few things and would like to hear your opinions.
Basic information:
1. The plot of land from the municipality (fully serviced) is financed and will be paid off by the end of the year. The municipality still needs to complete the servicing and carry out the land survey (paid by the municipality).
2. The architect has completed the design planning.
3. The initial phase is planned as an extended shell construction (i.e., groundwork, drainage, shell construction, roof).
4. After that, known contractors will handle the interior finishing.
Items 1-2 will be paid out of pocket. Items 3-4 will be covered by the house financing, which should be finalized at the beginning of January. Logically, there are a few items between steps 2 and 3.
In my view, the following points are those that would make the house financing ready for disbursement (so that the shell builder can start construction). I hope my assumptions are correct, since without house financing ready for disbursement, the shell construction cannot even begin ;-) .
- Building survey, 1000€
- Building permit via exemption, 1000€
- Additional payment for floor area, 300€
- Second notary fees (new land registry fees due to house financing), 2500€ (essential for the loan in my opinion, because without land registration for the financing bank, there is no money)
- Builder’s liability insurance, paid
- Construction all-risk insurance / builders’ risk insurance, 400€
- Soil report, 1000€
- Energy consultation (probably not the full amount in the first step), 3500€
- Provision of construction electricity/water, 700€
Based on my estimate, I would be looking at around 10,000–11,000€ to pay out of pocket before the next invoices can be paid through the house financing, is that correct?
Are there any points missing, or are my estimates too low?
Zaba12 schrieb:
Could you please send me a link via private message so I can read up on what you mean here or what a utility provider would require so early?Which link?
Sorry, our house has been standing since 2014, and we were surprised by the bill in 2013. However, the issue of connection fees for electricity (or water) was already settled before the house was built.
Every utility provider will handle this differently, but ours is certainly not an exception.
So: check with your utility provider 🙂
So.. I have just been on the phone with the municipal utilities.
@ypg The item you mentioned is the connection fee, which we partly paid when purchasing the plot. The invoice you received will be a recalculation on our side because we have 119m² (1280 sq ft) of floor area due to the basement plus more living space than the municipality estimated in the purchase agreement, so we have to pay more. This is estimated to be around €1700, but it will not be charged until 2019.
That means I only need to consider the costs for the house service connections (water, sewer, electricity, and telephone) plus the charges for the municipal utility worker who carries out the connection.
The service connections will probably be handled by the builder, so this is more likely to be an item paid from the house financing.
@ypg The item you mentioned is the connection fee, which we partly paid when purchasing the plot. The invoice you received will be a recalculation on our side because we have 119m² (1280 sq ft) of floor area due to the basement plus more living space than the municipality estimated in the purchase agreement, so we have to pay more. This is estimated to be around €1700, but it will not be charged until 2019.
That means I only need to consider the costs for the house service connections (water, sewer, electricity, and telephone) plus the charges for the municipal utility worker who carries out the connection.
The service connections will probably be handled by the builder, so this is more likely to be an item paid from the house financing.
C
Caspar20208 Sep 2017 09:18In general, I don’t really understand what your problem is. You have already contributed enough equity to the project (with the purchase of your plot of land).
Basically, you should be able to cover all the upcoming costs with a loan from any regular bank (the ratio just needs to be right, regardless of which exact source the payments come from). So what are you waiting for, or why are you delaying this so much?
Basically, you should be able to cover all the upcoming costs with a loan from any regular bank (the ratio just needs to be right, regardless of which exact source the payments come from). So what are you waiting for, or why are you delaying this so much?
I will try to explain my thought process that led me to this plan. Maybe it’s not the right approach after all.
The plot of land is valued at €92,000.
I need €415,000 for the house financing (construction costs, additional building costs, and landscaping). The house itself accounts for €355,000.
There is still an outstanding €26,000 on the land (financed with a variable loan). This outstanding amount is planned to be paid off through our savings rate by the end of December and a matured home savings contract due in late November, so it can be included as equity in the house financing without outstanding liabilities. Additionally, some expenses will already be settled now, which will bring my total equity to €105,000 by the end of December (that is €92,000 + €13,000).
That would put me at a loan-to-value ratio of just under 80%, which would allow me to get better terms on the house financing.
Furthermore, from the end of December, I would have a commitment-free period of 12 months.
These are the advantages I see. Or have I completely miscalculated?
The plot of land is valued at €92,000.
I need €415,000 for the house financing (construction costs, additional building costs, and landscaping). The house itself accounts for €355,000.
There is still an outstanding €26,000 on the land (financed with a variable loan). This outstanding amount is planned to be paid off through our savings rate by the end of December and a matured home savings contract due in late November, so it can be included as equity in the house financing without outstanding liabilities. Additionally, some expenses will already be settled now, which will bring my total equity to €105,000 by the end of December (that is €92,000 + €13,000).
That would put me at a loan-to-value ratio of just under 80%, which would allow me to get better terms on the house financing.
Furthermore, from the end of December, I would have a commitment-free period of 12 months.
These are the advantages I see. Or have I completely miscalculated?
C
Caspar20208 Sep 2017 13:02Your intention is good. Just don’t give off that impression. Or rather, I wasn’t really aware of it.
So on the cost side:
92,000 + 13,000 + 415 = 520,000
On the equity side = 92,000 + 13,000 = 105,000
That roughly equals = 79.8%
Has your bank already confirmed that you will get below 80%? Sometimes they have strange rules about what they include in the loan-to-value calculation.
Zaba12 schrieb:
That would put me at a loan-to-value ratio just under 80%, which would get me better terms on the home loan.
So on the cost side:
92,000 + 13,000 + 415 = 520,000
On the equity side = 92,000 + 13,000 = 105,000
That roughly equals = 79.8%
Has your bank already confirmed that you will get below 80%? Sometimes they have strange rules about what they include in the loan-to-value calculation.