A thorough research should be undertaken as of the location, first of all. The price needs to be verified thouroughly, preferably with a surveyor or valuator or an experienced agent. Expenses for this value estimation are usually borne by the party buying the Real Estate. It is no must to have it. (A due diligence is not common in Germany.) It also depends on the competition you have. In the current market situation there is high competition on the really good offers. One might have to be fast and sometimes even a bit unreasonable if one wants a really really lovely home.

Most important is to have the house inspected carefully, if not by oneself, then by a knowledgeable person in the area. This can be a broker or someone who knows what points to look for. And that can be done quickly by an experienced professional.

For condos it is important to the study protocols of any annual meetings of all apartment owners in the house. The importance of these minutes cannot be overstressed. Any and all problems relating to the house community and the house itself which may incur future costs will be discussed in these meetings and will be reflected in the annual meeting report which needs to be done by the management company responsible for holding these meetings.

Any rental contracts are to be examined. The actual rental situation has to be examined carefully. Especially so-called non-payers amongst the tenants have to be verified. Non-payment rates can be as high as 20-25% sometimes in bad areas.

Any renovations or repairs of damages need to be checked into. The ground sometimes is wet and the house needs to be dried out in the cellar area which can become expensive. The roof should be checked by an expert or a good eye before buying.

Age of the heating system is a very important point. Lots of restrictions and new laws have been passed over the last years. New standards have been set that must be met regarding Energy performance efficiency. It might be necessary to renew the whole heating system by then if it is older than ten years. 

The energy efficiency certificate is a legal must to be presented before the purchase. (Exception listed buildings and buildings with size less then 50 sqm; does not apply to single apartments or condos).

Next, the resale value should be somewhat estimated. Could that property be sold well again and for what price? What would be the possible ways and channels to sell the Real Estate again?

This being answered, the calculations of the living area (in square meters) and of other areas presented on paper should be verified at the actual location. In Germany everything goes mainly by area size (so-called Wohnfläche or Nutzfläche - living area and other usable or commercial area). This is especially important on rental properties as there rental value is all determined by area size.

All factors being well aligned, the financing needs to be secured. In Germany we request the buyer to present a confirmation of loan financing by a good bank before going to sign the notary contract or if he has the cash deposit, to bring proof of the existing funds.

Then the Deed of Purchase and any accompanying papers (like the official declaration of partition <Teilungserklärung>) should be checked into thoroughly. If you are not German-speaking it is better to have a professional translation done first of all even if that might cost some extra money.

The Notary Public date for signing the Deed is being agreed upon. At this meeting the Notary Public will read the Deed aloud for both parties, with any needed translator present. After making any changes or additions the Deed is being signed by both parties and the notary public. This contract is irrevocable, it cannot like a usual purchase be revoked within the next two weeks! What is written here is the agreed-upon purchase and all conditions thereof, like the day of payment, the day of handover to the new owner, any needed repairs or other actions to be done by the seller, any other specifications as needed.

It is the Notary Public who will perform the next actions needed like any and all applications in the so-called Grundbuch - the land title register, without which no sale of property can be done.

With the notary date the Real Estate agent's or broker's commission has to be paid. 

Between two to four weeks after the buying contract was signed the purchase tax on Real Estate needs to be paid. This is depening on federal country where you buy and ranges between 3,5% and 6.5% of the buying price stated in the contract. This tax must be paid within short time when requested as otherwise the tax office will not issue the clearance certificate - an important paper for transferring the possession from the seller to the buyer. Without that paper that transfer is not possible!

Within the same period of time the fee for the notary and registration fees have to be paid. All in all they comprise about 1.0 to 1.5% of the buying price of the Real Estate.

The terms of the contract can be very variable. That is why a contract needs to be checked by someone experienced in sales of Real Estate in Germany. There are many legal obligations but also legal finesses which can be to the advantage or disadvantage of the person buying.

At the notary public date all persons that are buyers have to be present, and show their legal papers (valid passports!). If a company is buying, the person(s) signing the contract need to bring their legalization papers from the company (authorization and an excerpt from the Chamber of Commerce entries showing the authorization status) plus passport. The contract needs to be personally signed after the notary public has read it aloud. It is legal procedure that the notary public reads the buying contract out loud. If the buyer does not understand German language, it will then be read in english by a qualified translator.

It is the task of the notary public to ensure that all parties understand what they sign in the end. Any questions that come up need to be answered.

Read part four and the rest of this series by following the links below. Use the Feedback form (at the end of each webpage) to send us your questions or feedback.

How to buy Real Estate in Germany Part 1: The current property market situation

How to buy Real Estate in Germany Part 2: Market view by Real Estate category

How to buy Real Estate in Germany Part 3: Steps to take when buying  (this page)

How to buy Real Estate in Germany Part 4: Financing Real Estate in Germany

How to buy Real Estate in Germany Part 5: Frequently asked Questions

Current purchase offers

The information provided here is meant as an assistant guide to your attempts to invest into the German Real Estate market. No part of this information claims to be complete, up-to-date or binding. The publishers will not take any responsibility for consequences of following this information or tips given here but rather advice to personally consult an agent, notary public, tax consultant or Real Estate expert in Germany.



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