Here's how to balance selling your house and building a new one

Many people dream of building their own house. This also applies to people who already own their own property. The reasons for this can be varied. If you decide to build a new house and want to sell your old property at the same time, you have to take a lot into account. Bringing house building and house selling under one roof is possible. However, it requires the right planning.

Building a house requires time and planning

Building your own house is a lengthy process that often requires a great deal of your attention. It is important that you do not approach such a project hastily. Before the foundation stone can even be laid, a building plot must be purchased, construction partners and property developers found, and a satisfactory construction plan drawn up. In addition, the approval of the respective building authority is necessary for every house construction, which makes the compilation of documents and visits to authorities necessary.

Selling a house while building a new one – A special challenge

If you already live in your own property and now want to trade it for a newly built house, the question quickly arises as to what you will do with the old property. Selling the house is an obvious solution. It offers the advantage that you can raise a large sum of money relatively quickly. Especially with an expensive project like building a house, such a financial boost can come in very handy.

Similar to building a house, however, selling a real estate property can quickly turn into a time-consuming matter. On the one hand, you have to find a suitable buyer. On the other hand, you also need numerous documents for the sale. Added to this is an indefinitely high number of property viewings, sales pitches as well as the Involvement of a notary public.

If your old home has not yet been paid off, you must also contact your bank. As long as you have not paid off all the debts in Land Register have been paid off, your bank can refuse to grant clearance. However, without the corresponding clearance, it is not possible for you to transfer the ownership rights to a potential buyer. Therefore, in that case, you must reach an agreement with your bank beforehand.

If you now decide to build a house and sell a house at the same time, you have a lot of work ahead of you. It is all the more important that you plan all the necessary steps precisely and create a detailed schedule. However, you should sufficient time buffer install. Because unexpected delays can quickly occur both when building a house and when selling a house or apartment.

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A question of timing

How long it takes until you can move into your newly built house depends on numerous factors. Finding a suitable construction partner and planning professional, as well as the subsequent planning, can easily take several weeks. The subsequent building permit takes between one and twelve weeks.

Much depends on what kind of house you want to build. With prefabricated houses, planning and construction usually proceed much faster than with a conventionally built masonry house. While the structural shell phase for a prefab house typically takes only a few days, you should plan on about three to four weeks for this with a masonry house. The construction of the basement or the creation of the floor slab takes between two and five weeks for both prefab and masonry houses. The most time-consuming part is the subsequent interior finishing, which can easily take between eight and twelve weeks. With all of this, however, you should keep in mind that problems and delays can always occur.

However, the same applies to selling a house. Experience has shown that Private sales mostly take significantly longer than if you enlist professional help for this. This can become a problem if you need the money to finance your new home. In the worst-case scenario, this can lead to delays. To prevent this, you should ensure that the sale of the property and the construction of your new home are well coordinated.

bridging with interim financing

If it is foreseeable that the sale of the house will be delayed, but you urgently need financial resources for the construction of the house, your bank can offer you a so-called bridge loan offer. Banks usually grant such interim financing to customers who, from a medium-term perspective, have the necessary capital for home construction, but cannot access it in the short term. This often applies in the case of a planned real estate sale.

Such interim financing is usually an expensive matter, as there is no fixed interest rate for it. Instead, the interest rate is adjusted every three months based on the current market situation and interest rate trends. The term depends on when your equity becomes available. Banks grant for a interim loan, however, only for a period of 24 months.

While interim financing does not require the entry of a land charge in the land register, the bank will not approve interim financing without appropriate collateral. The expected payment from the sale of your house primarily serves as collateral. Otherwise, the bank will insist on your property as collateral.

First sell the house, then build?

You should carefully calculate all financial aspects during planning. Under certain circumstances, it may be worthwhile to complete the sale of the property first and then begin building the house. This has the advantage that you do not have to deal with all arising problems at the same time. In addition, the sale of the house gives you additional equity, which may help you avoid costly interim financing. However, such an arrangement entails the additional problem that you now have to look for interim accommodation before your house is completed. In that case, you have the option of making an agreement with the buyer of your property regarding your move-out. You can stipulate that you will only move out once your new property is completed. In return, you could offer the buyer that they initially only transfer a down payment and the remaining amount is only due after you have moved out.

Such a contract is moreover useful even if the sale of the house only takes place shortly before the completion of the new build. In this way, you prevent being surprised by a sudden delay in construction occurring shortly before the end and suddenly no longer having a permanent place to stay.

The real estate agent can help

The addition of a A broker offers you various advantages in such a situation. For one thing, a real estate agent can take a lot of work off your hands when selling a property, giving you more time to focus on planning and building your new home. Furthermore, this increases the chance that you will sell your old Sell property faster. This way, you can prevent a financial bottleneck and, if necessary, avoid having to take out interim financing.

In addition, a Broker We can also help you, if necessary, negotiate a suitable purchase agreement that allows you to continue living in your old house until the new one is completed. Some potential buyers might be deterred by such a demand, which is why additional experience in house sales and negotiation is an advantage.