Buying a property in Germany Guide

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From finding a house or an apartment to signing the contract, we take you through the process of buying a home in Germany. 

Although we stick to our belief and commitment that we are probably your best port of call when buying a property in Germany, we understand that we may not have the property that is right for you. So this article is written in an UNBIASED way for you to consider all your buying options when investing in Germany. We hope it helps. 
Should you rent or buy in Germany?
House prices and rents have risen dramatically in Germany in the last decade, with rents rising 15 percent between 2008 and 2013 and house prices rising 23 percent in the same period. German property has been seen as a stable, reliable investment by both local and overseas investors, and the market has been largely resilient in the wake of the 2008 financial crisis.
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How to find a property to buy in Germany
Properties may be sold either privately or through an estate agent (Immobilienmakler). In either case, the onus is usually on the buyer to find a property they are interested in and then approach the owner or their agent. This also means that estate agents are usually paid by the seller, but this is not always the case. As agents' fees are typically 3–7 percent of the purchase price, it's important to check who is paying them. With all our prices include all agency fees (except the usual legal costs and purchase taxes that are paid by the buyer.) 

As in most European countries, you can find adverts in newspapers and online. Properties for sale may have a sign in the window or notice board in the garden advertising their status, but this is relatively rare in Germany so don't count on spotting every house for sale, even on a street you walk down every day. Also remember that unless you speak fluent German it will be next to impossible to deal directly with many older landowners, especially in the east where the best bargains are to be found!
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Choosing a property
Germans typically expect to buy a property and live in it for an extended period, or for life, so take time making the decision. Turnover in attractive areas can be low, so it's best to give yourself a year or more to find and buy the perfect home.

To be classed as habitable, houses in Germany have to meet certain minimum legal requirements regarding roofing, windows, heating and similar items. You can expect to be given some information on these factors, but you may not get full information. And of course it is still legal to buy and sell properties which require renovation to meet these standards- and this is where many of the bargains are to be had. Remember, structural surveys are not a standard part of the process, but are nonetheless a good idea. You can hire an architect or a surveyor (amtlich vereidigter sachverständiger) to do a survey- at your cost of course. Just remember when bargain hunting- use your head, don't get over excited, and if the seller is NOT willing to allow a survey or inspection, then WALK AWAY. We always allow clients the time to inspect or have the properties we sell inspected, even if they are properties requiring renovation- you should always know what you are buying!

It's important to note that under German law, it can be hard to remove tenants, so if you are buying a property you intend to occupy yourself, choose one that is unoccupied!
The legal process
once you've found a property it can take just over a month to complete the deal. The steps are typically as follows:

1. Investigate mortgages and get an offer in principle.
2. Find a suitable property.
3. Make an offer.
4. The notary (notar) will draw up the sale contract.
5. Finalise the mortgage.
6. Sign the contract.
7. Notary registers the sale.
8. Around Four weeks later, you must pay the property sale tax.

It's important to note that signing the contract isn't enough to transfer the property. The property must also be registered, which the notary will do. At this point, the government will check that there are no outstanding issues regarding the sale. The notary will already have made a check, so this rarely raises an issue, but if it does, the property transfer will not be complete until the knots are untangled. For this reason, many people choose to use the notary as an escrow. In this case, the sale price is transferred to the notary's account (notaranderkonto) before being released to the seller.
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You are legally required to use a public notary (notar) to complete the sale of a property. The notary will act as a middleman or arbitrator, and should be impartial.

The notary will check the records to ensure that there is no reason why the sale cannot go ahead, however they will not inspect the property or demand information on its condition from the seller. They will ensure that all the paperwork is completed correctly. The deed of sale will be witnessed in their presence.

You have the opportunity to choose your own notary, and if you can find one who speaks your language, do so. Otherwise your embassy will often have a list of translators they can recommend, or our website has a selection of quality translators or lawyers for you to choose from.
Funding purchase: deposits and mortgages
You should expect to put down a significant deposit when you buy a home in Germany. A minimum deposit of 20 percent is standard, however expats have been asked by lenders for deposits of 40 percent as they are seen as higher risk. You may also be asked to provide evidence of regular savings over the last several years. 

A mortgage (Hypothek) is offered by most banks. The major and national banks typically have a mortgage advisor on staff, who will be able to discuss your needs with you. Some even speak English, but this is not guaranteed. Get an idea of your situation using an online mortgage calculator before your appointment. Most German banks have an online section where you can work through the paperwork to apply for a mortgage in your own time. They will then follow this up with a phone call and an in person meeting before agreeing a mortgage in principle, which you can use to put in an offer on a property.

Mortgages typically have a 25 or 30 year period, with interest rates fixed for the first 5 years or so. Variable interest rates and other loan periods are available, but Germany does not have some of the riskier mortgage types that are available in the USA and UK. You will not find, for example, an interest only mortgage for the full value of a property.

As a benefit, part of your mortgage interest may be tax deductible depending on your situation. However, this benefit is unlikely to offset the capital gains tax mentioned above, so is typically only an advantage for those who stay put for a long period.
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Fees and charges
When buying a property in Germany, you can expect to pay most of the costs. Typically, the seller will pay the estate agent, however if you have used a buyer's agent or the agent splits their fee, the buyer may still have to pay this cost.

The total cost to the buyer of purchasing a property is usually around 10 percent of the purchase price. This covers:

Property transfer tax (grunderwerbssteue) of 3.5–8 percent;
Notary's fees 1.2–1.5 percent;
Registration fees 0.8–1.2 percent;
Estate agent's fees, if shared, of 1.5–3 percent, plus VAT at 19 percent.

Apart from the estate agent's fees, costs are typically fixed by regional governments. They vary somewhat across Germany, hence the ranges shown above.

We have developed an app for both Apple AND Android which will calculate you legal fees for you, please feel free to download it here!
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The contracts
Contracts are in German and signed in the presence of a notary. You should ensure you fully understand the contract before signing, and bring an interpreter with you if necessary. You have the right to have a translator with you, but you will have to supply (and pay) them yourself. In some areas, you may be able to find a notary who is bilingual. All notaries that work with our company are fluently bilingual and no translator is needed- plus we translate all the sales and deeds for you as part of our excellent service!

If you will be arranging financing for the property at the same time as you are arranging the sale, it's important to include an exit clause in the sale agreement that gives you a way out if you can't arrange a mortgage.
We hope this article has been of help to you. Don't hesitate to contact us or visit us at, if you need any help purchasing your property in Germany!


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