Buying Property in Germany: How Does It Work?

Step 1. Open a Bank Account and Check the Property

Opening a Bank Account

In Germany payments between the seller and the buyer of real estate are generally made via bank transfer. Other ways of transactions are barely used within the market. It doesn't matter whether you pay from a German or international account, both are equally permitted. No worries: foreigners do not have any obstacles to opening an account in a German bank. But keep in mind that buyers with non-transparent financial past can face some difficulties due to strict legislation policy against money laundering.

To open an account you have to be personally present for proof of identity and other formalities. The current method of "postal legitimation" allows German citizens to verify their identity to the bank in every postal office, but this rule does not apply to foreigners.

Check the demanded documents beforehand. Most often foreign clients are required to give their foreign passport, validated address and correctly field bank forms. Some banks also ask for a letter of recommendation, some demand a post address within Germany (in such case you can use the address of your real estate agent) and conversational level in German or English language. Occasionally, the client is required to provide an income certificate.

The bank is making a service contract after checking your documents and granted information. After finishing all these procedures you become a proud owner of a euro account. And finally can put money there.

Don’t forget to address your bank in order to check what documents and certificates you may need to prove the purpose of payments, if you prefer to pay from an already existing account.

Checking the Property

First thing every potential buyer should do is to see the ‘Grundbuch’ (land registry). You can do it yourself or with help of a private notary. The land registry has all information about current and previous owners, potential encumbrances and mortgages, etc.

Notice that buyers can take the burden of registered encumbrances and mortgages only if they give their consent. During the transfer of ownership debts and overdrafts must be erased from the land registry.

You as a buyer do not risk anything: payment is transferred to the seller’s or creditor’s account only after the bank permits to erase encumbrances (Löschungsbewilligung). The debt repayment can be made at the expense of the purchase price or it’s part. If that is not enough, then part of the repayment must be covered at the expense of the purchase price, and the rest of the debt must be finalized between the buyer and the bank.

Besides the land registry there are several other very important documents you should pay attention to, which are the housing statute (Teilungserklärung), minutes of owners’ meetings (Eigentümerversammlungsprotokolle), the economic plan (Wirtschaftsplan) and finally utility bills (Nebenkostenabrechnung).

The housing statute can tell you about parts of private and common ownership on the land and in the buildings as well as potential rules (elections of a supervisor, animal housing, etc.).

From minutes of owners’ meetings you can learn a lot of useful information about other owners in the household, repairment decisions, currently discussed issues, etc.

The economic plan and utility bills are here to show you sums of obligatory monthly payments. They are called ‘Hausdeld’ and ‘Wohngeld’. You can also check what exactly you have to pay for and whether you can optimize and lower the total amount.

Properties in Germany

24 500 000 €

Commercial property in Berlin, Germany

8500 sq.m

Germany Berlin Shopping center near the metro A large shopping center near the train station and metro station in the Neukeln district of Berlin. Approximately 60 thousand people visit the shopping center daily. Land area: 15400m2 Year of construction of the building: 2008 4 floors, parking for 215 places Heating type: gas...

INDOM

1 581 000 €

Commercial property in Germany

1085 sq.m

Germany The land of Lower Saxony, the Hanover district of Springe Penny Supermarket Commercial building for long-term lease Penny Supermarket (Rewe Group) The object is located in the center of Springe (Springe-Bennigsen, Hanover district, population 30 thousand), next to the railway station. Land area: 4850m2 Building area for...

INDOM

3 100 000 €

Hotel in Wiesbaden, Germany

1820 sq.m

3* Hotel in Wiesbaden with a good revenue! Description and Location: 3 * Hotel in good location in Wiesbaden (capital of the federal state Hessen) with bar and terrace. Wiesbaden is one of the oldest spa towns in Europe. The city can easily be accessed from around the world via Frankfurt Airport ,which is located 15 km east of Wiesbaden....

Estate-Service24

3 000 000 €

Commercial apartment building in Frankfurt-am-Main, Germany

663 sq.m 4% per year

Apartment building for sale in Frankfurt am Main. 8 apartments with an area of 600 m2. Rental status: 100%. Rental income per year: 4% euro. Floors: 6. Heating: central. Parking space: 9 places in the underground garage. Elevator: yes. Balconies: yes. P.S. For the purposes of confidentiality and in accordance with the conditions of the owner,...

Estate-Service24

8 940 000 €

Commercial property in Brandenburg an der Havel, Germany

5211 sq.m

Germany Federal State of Brandenburg 4 Netto Supermarkets Investment package: 4 new Netto supermarkets in different cities of the Federal State of Brandenburg. All buildings are put into operation in 2017. Lease agreements have already been concluded with the Netto supermarket chain for a period of 15 years. Total...

INDOM

1 560 551 €

Flat in Berlin, Germany

155 sq.m 4 3

Duplex with 3 bedrooms and a private garden is located in a new club project in the prestigious Grunewald district. The project consists of two elegant buildings of classical architecture with 5 apartments each, located on a plot of 2,000 sq.m. The houses are surrounded by a landscaped park with mature trees.Project features:Apartments with an...

NF Group

5 000 000 €

Shop in Dresden, Germany

3000 sq.m

Credit Business on sale

Ready-made business in the suburbs of Dresden EDEKA has been the anchor tenant for almost 20 years. Due to the success of the retail outlet, the old facility was demolished and a new one was built in its place, in accordance with current construction standards and a modern tenant concept. In November 2015, the building was commissioned. The...

BiG Property

5 100 000 €

Shop in Upper Bavaria, Germany

2116 sq.m

Business on sale

EDEKA Supermarket in Bavaria The new supermarket of the largest retail chain EDEKA is located in a large city. The B8 federal road connects the city with the A3 and A45 motorways. The proximity to residential areas and the city center makes this location even more favorable. In addition to the anchor tenant EDEKA, premises for ROSSMANN are...

BiG Property

1 890 000 €

Villa in Frankfurt-am-Main, Germany

439 sq.m 10 5 3

The house is located in a small cozy village in Rheinhessen, one of the most famous wine regions of Germany, in close proximity to Frankfurt and the famous resort of Wiesbaden. This stunning house with an area of 439 m? It includes three bathrooms, two guest toilets, four spacious bedrooms, a master bedroom with its own bathroom, a yoga studio...

NF Group

3 400 000 €

Commercial apartment building in Frankfurt-am-Main, Germany

380 sq.m 3.8% per year

Credit

Apartments in Frankfurt am Main are a reasonable investment in liquid objects with the potential for profitability growth! Frankfurt am Main, one of the top business centers in Germany, is undoubtedly considered one of the most promising and attractive large cities both in economic indicators and in comfortable living conditions. A package...

Estate-Service24

200 900 €

Commercial property in Upper Franconia, Germany

49 sq.m 4% per year

Credit Business on sale

Apartments in a nursing home (new project) with a long-term lease agreement in the center of Bayrot. All rooms have their own bathroom, on each floor there are public areas for communication and relaxation. P.S. For the purposes of confidentiality and in accordance with the conditions of the owner, photos of the object are not subject to...

Estate-Service24

2 520 000 €

Hotel in Germany

1200 sq.m

Germany The land of Hesse, adm. Darmstadt district Ruesselsheim The hotel is 12 min. from the airport Great offer for investors: a hotel near Frankfurt International Airport. Land area: 1920m2 Usable area of the hotel building: 1200m2 Number of parking spaces: 40 Year of construction: 1950 4 gardens Part...

INDOM

560 000 €

Mansion in Essen, Germany

484 sq.m

ID 35330 Strategy: 1. Purchase of an apartment building with a current yield of about 5.6% per annum; 2. Increase of rental rates due to renewal of agreements with tenants within 5 years; 3. Resale of the object at a higher price. The project is being implemented jointly with a German management company specializing in apartment buildings in...

Russia Sotheby’s International Realty

394 000 €

Apartment in Duesseldorf, Germany

80 sq.m

ID 35396 1. 2-room apartment 85.34 m2, price 447.500 € (+ 20,000 € underground parking) 2. 4-room apartment 101.63 m2, price 508.680 € (+ 20,000 € underground parking) 3. 3-room apartment 79.92 m2, price 394.000 € (+ 20.000 € underground parking) Commissioning end of 2020

Russia Sotheby’s International Realty

14 300 000 €

Commercial property in Wuppertal, Germany

33900 sq.m 7% per year

Residence Business on sale

Logistics and warehouse center with office premises in the federal state of North Rhine-Westphalia.

Estate-Service24

483 000 €

Commercial apartment building in Duisburg, Germany

491 sq.m 5.71% per year

Online Viewing Remote Transaction

Apartment house for sale in Duisburg 1 room - 35 m2 5 apartments (all rented) - 456 m2 Central gas heating. Plot area - 467 m2 The commission for the Buyer is + 4.76% to the cost of the object. Details on request.

DEM GROUP GmbH

379 000 €

House in Oldenburg, Germany

127 sq.m 5 3 2

Online Viewing Remote Transaction

For sale a well-maintained and very cozy private bungalow-style house for one family, with an area of 127 m2A parking space is providedWell-groomed territory of a green plot, good neighborsThe house was built in 2005The house has modern gas heating Composition of premises:5 rooms3 bedroomsguest room 2 bathroomsOn the upper floor, you can...

DEM GROUP GmbH

220 000 €

Flat in Wuppertal, Germany

110 sq.m 5 2

Online Viewing Remote Transaction

A room for sale on the 1st floor, in the city of Wuppertal. A very beautiful place in the city center with a wonderful view of the city. You can purchase this wonderful property for a bright apartment, office, practice and even a good hostel. The house was built in 1985 Central gas heating 5 rooms The room is rented out and generates...

DEM GROUP GmbH

1 450 000 €

Villa in Berlin, Germany

226 sq.m 5

Do you dream of living in Berlin, like in Italy? This is probably the best way to describe the Mediterranean character of this coastal villa. The villa was built in 2009. From the spacious entrance you can get to two full-fledged floors, decorated in a relaxed luxurious style. On the ground floor there is a spacious living-dining room and...

EW Real Estate

297 000 €

Flat in Germany

76 sq.m 4 2 1

The colorful “To Huus” consists of seven low-rise apartment buildings and well-kept outdoor areas with a system of paths, communal open spaces and play areas as well as parking spaces for cars and bicycles. The solid new buildings with a simple facade were built in 1969 and 1987 and modernized in terms of energy efficiency in the 2000s. A total...

Habita International Estates Ltd

See more 445 similar properties

Step 2. Conclude a Contract

To sign a contract the buyer and the seller should meet at a notary office. Both parties don't have to be present at the office at the same time. The seller and the buyer or their representatives can seal the deal at different notaries in different places. The contract enters into force after both the seller and the buyer sign it. The only mandatory condition is to certify the agreement at the notary’s.

Take into account that a notary has to read the contract out loud and reply to any questions and concerns. After the reading and questioning both the seller and the notary sign documents and get verified copies.

You are not required by law to pay a deposit, but most brokers take an advance on their commission. Usually it is of either 1% of the cost for those German buyers who do not seek for translation and deal support or in the amount of the entire commission for foreigners.

Step 3. Make a Payment

There are two possible options for payments between the seller and the buyer:

• a direct payment to the seller's account;
• settlement via a notary's trust account (Notaranderkonto).

The first option in the most popular one. In this case, the payment is provided to the seller’s account after receiving a letter from the notary stating that every necessary prerequisite has been met (Preisfälligkeitsbescheinigung).

The possible prerequisites are pre-registration of property rights in favor of the buyer (Auflassungvormerkung), obtaining a certificate from the bank for permission to erase encumbrances (Löschungsbewilligung), if any of them are still present, obtaining permission from a household supervisor for sale and purchase (Verwalterzustimmung).

Payments via a notary's trust account are only used when both parties wish to transfer ownership as quickly as possible. A trust account is opened by a notary specifically for this transaction after signing the contract of sale, where the buyer pays the purchase price within a particular period of time (usually 2-4 weeks). The buyer gets keys and the right to move into the property after proceeding the payment. 

Only the notary has access to a trust account and pays the purchase price to the seller's account after completing all necessary prerequisites for a payment.

Foreigners do not have any obstacles to opening an account in a German bank.

Step 4. Registrate as the New Owner

The notary sends an application to the land court (Grundbuchamt) for pre-registration of the buyer as the new owner immediately after signing the contract of sale. After this the payment is transferred to the seller's account by the buyer directly or via a notary’s trust account.

When the seller receives money and pays real estate taxes, the notary sends an application to the land court for final registration and deleting of the preliminary one. All data is stored in the electronic cadastre (the land register), from which the owner can request an extract at any time.

Usually the contract specifies the date of "economic transfer of ownership" from which the buyer takes over all rights and obligations related to the ownership of real estate: accommodation, renting, utilities, etc. The economic transfer of ownership rights is often appointed on the 1st day of the month following the final transaction or the next day after. It is done for the sake of convenience of calculations.

The whole procedure from signing the contract and registry of a new owner to the final registration of property rights in the land registry takes from 2 to 4 months on average. It can take even longer, if property is sold by a bank, an insolvency administrator, a guardianship court, with the involvement of a mortgage loan, etc.

Quoting conditions of Prian.info materials