Buying property in Germany can be cumbersome for the novice. At Get Estate INV, we have many experts and property managers who know the minutiae of an effective acquisition process. Here are top five things to know about property purchase in Germany:
1. Secure Financing Unless you are paying the property cash, you will need to present to the seller an irrevocable acceptance of loan financing with a reputable bank before going to sign the notary contract. That is the law, and German regulators rarely grant exceptions in this process. Get Estate INV has existing relationships with financing banks, so do not worry about this aspect. We can help you finance up to 70% of the property price with a reputable financing institute, mortgage bank or traditional bank.
2. Review the Deed of Purchase Germany law mandates that the buyer review the deed of purchase and any ancillary documents, such as the “Teilungserklärung,” the official declaration of partition. (We can help you navigate this process.) The deed includes many provisions, which could or could not be to your advantage, so our team will ensure you understand everything before you sign the paperwork. We work with experienced translators, lawyers and realtors.
3. Set an Appointment with the Notary Public to Sign the Deed If necessary, a Get Estate INV specialist will represent you at the deed-signing meeting. The Notary Public will need proper identification (passport preferred) for all persons buying the property. When the Notary Public ascertains that all parties have met all conditions, he or she performs the next actions, including all applications to the land title register (Grundbuch).
4. Pay purchase related fees The real estate broker’s commission typically ranges from 3.5% to 7% of the property price, plus VAT.,. The commission is due at the meeting with the Notary Public. The Notary Public generally charges fees ranging from 1.0 to 1.5% of the purchase price (land registration, notarization, etc.).
The fees are due two to four weeks after contract signature. Also due within the same period is the purchase tax on real estate, Grunderwerbsteuer, which is 6% in Berlin and 6.5% in NRW. Failure to pay this tax will delay the issuance by the tax office of the clearance certificate, which is an important paper when transferring title from the seller to the buyer. (Without the clearance certificate, the transfer is not effective.)
5. Remember a few remaining things.
A. You do not have to be a German resident to purchase property in Germany. As long as you have a valid passport and sufficient funds, you are OK. (Remember, though, that owning property in Germany does not entitle to a permanent visa or other immigration document. You will need to apply for that separately.)
B. To recap the expenses related to purchasing property in Germany:
- Purchase tax (Grunderwerbsteuer), 6% in Berlin and 6.5% in NRW
- Notary fees (1.5%)
- Agent fee (5%-7.5%);
- Bank broker(financing) 1.2%
- Registration fees and legal fees (up to 2.38%);
Mortgage payments (depending on the amount financed and the lending institution)Total fees are roughly 16%-18%of the property purchase price (excluding mortgage payments).
C. The whole process usually takes approximately 2 to 4 months. You will receive the land title register’s confirmation a few weeks after signing the notary deed. During that period, you officially own the property, and your interests are protected.
For more information on Berlin property investment, contact our Client Service team today. We are ready to help you secure a property that fits your investment goals. e. While you are outside Germany, we will appoint a property management company to take care of your asset.
D. We can assist you in selling or renting the property.
E. Other things we do: we speak several languages (including German, English and Arabic), have smooth communication and can better explain the process. We accompany the buyer in all of the purchase steps: finding the suitable property, conducting viewings in Germany, phone support, conducting all the official and bureaucratic actions on behalf of the costumer. We help the buyer to receive financing from German banks. We work with house management companies who take care of all the maintenance of the buildings and work with the tenants, including collecting rent and sending it to the owner, so the investor doesn’t have to deal with all this stuff.