
What should you do if the financing falls through and the appointment with the notary is canceled?
This is not uncommon at the moment. Interest rates are threatening to rise to counter inflation, and banks are already factoring this into their lending policies. This does not exactly make the search for real estate easy, and real estate transactions that seemed to be a done deal ultimately fall through due to financing issues. What can sellers do to avoid this?
And back to square one
Once the right buyer has been found and an appointment with a notary has been made, many assume that nothing can go wrong now. Marketing is stopped and other interested parties are turned away. If everything falls through, the process starts all over again and the property has to be marketed once more. Is it possible to save the time, money, and effort that this entails?
Check the creditworthiness—or have it checked
before deciding on a buyer, check whether they can actually afford the property. For example, you can obtain information from a credit agency such as Schufa. However, you usually have to be a member to do this, and the membership fees are relatively high. According to Section 29 (2) of the Federal Data Protection Act (BDSG), a "legitimate interest" is also required. Proving this requires a skill in wording that may be difficult for laypeople.
You can also ask the interested party to provide self-disclosure, which they can also request from Schufa. It is important that the information is up to date and contains personal data and score values that enable a risk assessment to be made. In addition, you can request a financing commitment from the bank.
Do not turn down other interested parties too early
In view of possible financing rejections, you should only reliably reject other interested parties once the purchase agreement has been concluded. Stay in contact with them. As this involves a considerable amount of effort, you should work with a real estate agent. Interested parties also feel more comfortable with an agent because they can show them other properties if they are ultimately not suitable. An agent will also check the creditworthiness of interested parties for you. This saves you time and, above all, protects you from unpleasant surprises. Last but not least, it reduces the risk of the notary appointment being canceled.
Would you like to be sure that your prospective buyer can actually afford your property? Contact us! We will be happy to advise you.
Notes
For reasons of better readability, the generic masculine form is used in this text. Female and other gender identities are expressly included insofar as this is necessary for the statement.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please have the facts of your specific case clarified by a lawyer and/or tax advisor.
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