Purchase Procedure

How to buy property in Germany

Any foreign person can buy German residential and commercial estates without any restrictions. However, to confirm the legitimacy of the purchase, a person will need to provide an extract from the Chamber of Commerce. The whole procedure of buying a property in Germany is simple but takes about 2-3 months.

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1. Signing the agreement on property search

First, a person needs to conclude a contract with our company on the search for a real estate property. We can e-mail it to you by request. This is standard contract that is used by the majority of realtors in Germany. It ensures that the realtor’s services will not be free. For example, a potential buyer be dishonest after h/she receives all the necessary information about the property and its owner. The contract on the search for a real estate is designed to protect the interests of a realtor in such cases and guarantees him the right to remuneration for the work done by him in such cases.

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2. Property Selection

If the buyer wants to purchase the property, we concluding an agreement on the provision of real estate services regarding this particular property. In accordance with this agreement, the buyer undertakes to pay the cost of the services of a realtor (from 3.57% to 7.14%) of the market value of the property. If the market value of the property does not exceed €55,000, the minimum price for the services of a realtor is €3,900. After signing the contract, the booked property is withdrawn from sale.

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3. Reservation of the property and contract for the provision of real estate services

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4. The preliminary contract of sale

As soon as the property you have chosen is booked, we send all the necessary documents for a sale transaction to a notary. The notary prepares a preliminary contract of sale that familiarizes the parties with all the terms of the transaction.

When drafting a treaty, the following provisions should be taken into account:

the price of the acquired property and the date of payment;
terms of the property ownership transfer, debts and profits;
Lack of commitment on the part of the seller or assuming the buyer’s obligations;
a guarantee by the seller that there are no significant architectural and construction deficiencies;
a guarantee from the seller about the absence of old outstanding debts on the land plot;
the right to refuse the contract if there are significant shortcomings;
transition of the existing property insurance to the buyer.

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5. Checking the object

Any property in Germany must be registered in the land registry (Grundbuch).

The buyer has the right to familiarize himself with the content of the land registry independently or with the help of a notary.This extract contains all the important legal information directly related to the property (owner’s name, price, area size, availability of security charges, etc.).

The duties include:

full and independent consultation of the parties;
drawing up a contract of sale;
checking the property for legal purity;
notarization of the contract of sale.

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6. Signing of the sales contract

After accepting the terms of the preliminary contract, the parties enter into a final sales contract in the presence of a notary. Before signing the contract, the notary must read through the text of the contract out loud and distinctly in German. If one of the participants in the transaction is a foreigner, the text of the contract must be translated for him by an interpreter. The document, signed by the buyer and seller, is certified by a notary.

The presence of the buyer on the transaction is optional. His interests can be represented by any authorized person with a power of attorney issued by a notary.

After the conclusion of the transaction, participants receive notarized copies of the contract of sale. The original remains in the archives of the notary.

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7. Payment process

In Germany, any estimates for real estate cost must be made in a non-cash form. To do this, the buyer can open an account with a German bank or pay from the account of any foreign bank.

In most cases, the acquisition carried out by transferring the required amount to the trust account of the notary. This method is considered as the most safe and convenient since the buyer can be sure of the reliability and integrity of the notary who controls the transparency and legitimacy of the purchase and sale transaction.

In accordance with the standard sales contract, an advance payment of the purchase amount is transferred to the seller’s account. It is usually 20% – 30%The buyer must pay in full within 30 days from the date of signing the contract.

After that, the notary carries out from this account all necessary payments related to the costs of registering the transaction (state duties, taxes, fees, etc.) and transfers to the seller the amount received for the property sold (if all the conditions stipulated by law are met).

In addition, the land cadaster records a preliminary transfer of ownership of the property that is called Auflassungsvornerkung (German). Thus, the buyer can be sure that his interests will be respected, and he will not be infringed in his rights.

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8. Transfer of ownership and registration of a new owner

Transfer of ownership is carried out either from the first day of the month followed by the day of receipt, or on the day following it.

From that moment the buyer is the actual owner of the property. The final transfer of ownership occurs at the registration of the land in a registry. To register the land, the notary must send all the necessary documents to the appropriate department of the land cadaster. If all legal preconditions and payment of a one-time tax on acquired property (Grunderwerbsteuer) are met, the land cadaster authorities the final registration of a new owner (Grundbucheintrag). An extract from the land registry is a legal proof of ownership. The buyer has the right to request it from the relevant land registry after the completion of the entire procedure for registering the property.

One-time costs for the purchase of real estate

Notary services and fees of land cadaster bodies: 0.5 – 1% of the value of the property;
Tax on the acquisition of real estate: 3.5 – 6.5% of the value of the property;
Stamp duty for property registration in the land cadaster: 0.5% of the value of the property (usually already included in the cost of notarial services);
Extract from the land cadaster: 34.80 – 44.80 € (depending on the timing of implementation);
Cost of attorney services: from 1% of the cost of the property;
Cost of the realtor services: €3,900 or 3.57 – 7.14% including VAT (depending on the rates in a particular federal land).

Purchase Procedure

How to buy property in Germany

1. Signing the agreement on property search

2. Property Selection

3. Reservation of the property and contract for the provision of real estate services

4. The preliminary contract of sale

When drafting a treaty, the following provisions should be taken into account:

5. Checking the object

The duties include:

6. Signing of the sales contract

7. Payment process

8. Transfer of ownership and registration of a new owner

One-time costs for the purchase of real estate

The tax rate for the acquisition of real estate in Germany

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