The process and the regulations while buying property in Germany for foreigners are the same as for Germans. The process of buying property looks complicated but we will explain to you in details.
1. Property selection and reservation
Choose the property with your real estate agent and make a reservation. The documents you need for a reservation are : copy of your passport, home address, phone number and e-mail.Usually a deposit is required within 3 working days after getting the conformation from the developer(by transfer). If your purchase could not be completed for any reason, the deposit will be fully refundable according to German law.
2. Attorney
reprensetation of an attorney to a German notary office to make an authorization. The buyers who are not in Germany can go to the German embassy or consulate in the local country for authorization.
3.Draft a purchase contract
4. Apply for a loan
5. Notarization of the purchase contract
A loan approval can take about 3 to 4 weeks. If it is a pre-owned house property, a third-party evaluation is required. After signing the loan agreement, the buyer can sign the purchase contract. If the buyer can speak German, he can sign the contract himself. If not, the buyer’s attorney, or the seller’s attorney, and the notary will attend the notarization in person The notary will read out the full purchase contract in German. Both parties can ask questions at any time. If both parties have no questions, they sign the purchase contract and the plan. It is possibly to make formal adjustments an clarifications during the signing session if necesessary. Within 4 to 6 weeks after notarization, the notary office will mail and post a notarized signed binding purchase contract to the buyer.
6. Registration of Land Titles
After the buyer and the seller have signed the purchase contract at the notary office, the notary office will forward the documents to the land office. The land office will first register the property for transfer (Auflassungs- vormerkung). After the buyer has paid 100% of the purchase price, the Land Office will make a formal land registration (Grundbucheintragung) . After the registration has been completed, the buyer will receive the updatetd land titel deeds. (Grundbuchauszug).
7. Payment of Property and other expenses
If the purchased property is an off-plan property, the payment is based on the construction process, generally divided into 7 steps:
The first payment is 30% of the property price, payable 6-8 weeks after notarization. The developer has the right to receive the down payment only after the buyer’s name is registered in land office.
The second payment is 28% of the purchase price, which will be paid after the completion of the building construction.
The third payment is 12.6% of the purchase price, which will be paid after installation of roof, drainage system and windows.
The fourth payment is 10.5% of the purchase price, which will be paid after completion of building services systems and drywall.
The fifth payment is 7% of the purchase price, which will be paid after laying floor and tile and facade decoration.
The sixth payment is 8.4% of the purchase price, which will be paid after the property is ready to move in;
The seventh payment is 3.5% of the purchase price and will be paid after the completion of all works.
Different projects might be slightly different, but it will also be clearly listed on the purchase contract
4-6 weeks after signing the contract, the buyer will receive additional fees for purchasing the property:
Property Tax: property tax in Berlin is 6% of the purchase price. After notarization, the buyer will receive a bill from the tax office within 4 to 8 weeks;
Real estate agency fee: in Berlin according to the project is usually 0% -3.57% of the purchase price.
Notary fee, land registration fee: Notary fee and land registration fee will be divided into several bills sent from the notary office and the land office, totaling about 1.5% of the purchase price.
Attorney fee: about 1% of the purchase price. The services of attorney and real estate agents last till the end.
8.Inspection and acceptance
For the purchase of off-plan properties, the developer will generally notify the buyer to inspect and accept the property before making the final payment. If the buyer finds that the property has issues , he should inform the developer immediately and inspect it again after repair. If there is no problem, the developer will hand over the key after the buyer has paid the last payment. Real estate in Germany is fine decorated. New property have a 5-year warranty.
