Signing the deal without financing

Real Estate
1

Hi there,

Just a simple rather stupid question: is there any downside or risk by signing a sale agreement at a notary before having any mortgage offer?

I plan to buy part of a property from a member of my family. I plan to get/sign the mortgage beginning of next year for various reasons. AFAIK there shouldn’t be issues from a financial point of view as regards getting a mortgage, I have 20+% of funding in cash/pillar 3a and the mortgage would not cost more than 33% of my income.

For our case, the notary told us that the “impôt sur le bénéfice des gains immobiliers” (probably Grundstückgewinnsteuer in German) will increase from 0% to 2% in 2025. So we are in the process of signing now, in order to avoid this “new” tax for the seller (a member of my family). Transfer of property would take place now, payment of the price ASAP next year.

Is there a risk that the bank/financial institution would somehow dislike this situation?

This would be from a legal/administrative point of view, not from the financial side.

Many thanks in advance.

2

You should talk with the bank now. There is no need to wait.

It should be totally standard for them to provide a financing confirmation well before the deal is made and even without agreeing the terms. (Or not provide it, if they dislike the price/property/terms.)

If your reason for waiting is that you think the interest rates will go down, they should be willing to provide a financing confirmation now and only negotiate the interest closer to the deal being signed.

3 Likes
3

That’s what we did, though we had a “pre-confirmation” from a bank. We couldn’t get a “full” confirmation because they don’t do one until the building permit is delivered.
In the sale contract, there’s a clause that the sale is canceled if we cannot get a mortgage of value at least X within a given time-frame (I think a couple of months after the delivery of the permit for us). Maybe ask your notary for a similar clause?

4

That’s what we did. First we signed the contract at notary, now we are looking for the mortgage promise (in fact comparing offers), and in 1-2 years fixing the rate.

Not sure if it would bring any negative aspect. Hopefully not.