Calling @reef-full! Next week we are voting on a site, and the time draws near when we will make our first offer to an owner. With the group grown, but far from complete, the question is: what is the highest amount we are willing to pay as an advance?
I will start: for a site that I am persuaded about, I am willing to contribute up to 400 EUR x m2 vendable, roughly 40,000 EUR in all (I need to check back on le programme).
Maybe a stupid question but what should we consider as the earliest date where the highest amount that we are willing to pay in advance should be available?
Thanks Alberto. Will think about it and get back to you soonâŠ
I assume you mean ânext weekâ figuratively , as in âvery soonâ?
Because technically we wouldnât be voting before another monthâŠ
Depending on what the owner agrees to, we might have to reduce the 3weeks period, but I donât think we would be able to vote next week anyway. No?
But I guess there is a chance that we have to be very quick, so maybe itâs an idea to start preparing ourselves for that and doing our homework (going and checking the neighbourhood, having a look at the site, etcâŠ).
@Sarah Next week refers to the end of the month, which is the deadline that the owner has provided, I guess? So I understood that we should already know by then how much we are willing to contribute?
This is a very smart question, actually, point taken. You can also frame the answer conditionally: ânext week I could be down for X, but if I have two months to prepare then I could contribute Yâ. The important thing is that you would be comfortable contributing the money to buy a site, not only that you have it available.
Talking to some people today, we find it a bit difficult to answer the question without knowing what level of risk we are taking of losing the option⊠We feel that we might need more certainty about this, hence my post about gathering more information.
What is your take on this?
Another question is how much cash we need to keep to get the loan from the bank. I seem to remember that triodos now accepts to finance 100% of the loan. Can somebody confirm this info? And if we go with another bank, is it right that it is generally about 10% of the cost of the appartment that you need to be able to bring?
Thanks a lot for that @Sarah. This is indeed a topic that we need more clarity on.
@reef-finance: I would like to prepare for a scenario where the feasibility study is going to be positive, the vote is going to be positive and we manage to get some sort of suspensive clause for the full payment that allows us to complete the group so that we can pay the entire sum in one go.
We are not sure whether any of this would materialise, but if it would, every day is counted, because then we need to know, possibly by 06/03 how we can raise the money.
If we go for a scenario where we divide one million over 20 households (which would mean we need to recruit 8 more over a course of say 6 months - letâs organise a discussion about that elsewhere), we are speaking about 50k per household, on average.
For quite a few of us that means we would already need to take up a small part of our mortgage (as not everybodyâs assets are liquid). If we would be one household buying one piece of land, we know that this is possible. But we are many more, which makes it harder for a bank to get certainty that they will be able to recover their money.
Hence my question: can you please make inquiries and see whether it is technically possible that some of us already get a small mortgage, as an advance on the rest of our unit? The way I understand it, answering this question is super urgent, because itâs an essential element to be able to decide whether we can make an offer or not.
hi @Lee
Relevant question.
I can ask Triodos bank or are we talking of people who donât have those 50k going individually to their banks? even if the latter, i can ask Triodos and i am sure they will say âokâ. But perhaps we need to understand what would be their process, correct?
Itâs been a hectic day today, and Iâll bring a debriefing tonight.
These are the key points I collected today with regard to getting ready:
Mark says it is possible to get a personal mortgage to pay for the site if there is a building permit. So in short the answer is yes.
Mark recommends to not do anything before talking to the notary. So the recommendation is to make an appointment for this Friday or else ASAP, so that we can go through the different scenarios on how we can get to an agreement while minimising risks.
Proces-wise Iâm still struggling quite a bit, so Iâm glad that Mark can join us on Thursday for a debriefing.
Just received an answer from Triodos re the smaller loan for the site which is less positive.
"Yes , there is a possibility, but the loans for the terrain or parts of the property are always part of the whole Credit , so there is no possibility to get a smaller amount in short notice .
So, the credit file has to be created with all the documents that are necessary".
I guess he is saying there is no possibility to take a loan only for the site and do it in a very short notice. We have to apply for the whole thing (the loan for the site + apartment).
Remember, the question is about money that is already available (so no loans, by definition) and that people are comfortable putting in. In the end, we can offer what we can offer: if the seller thinks itâs not enough, we donât have a deal. No point obsessing about it.