Finding the right property
- Der Makler / Die Maklerin
It isn’t mandatory to use a Makler (real estate agent) in Germany, but they can make the search and legal process easier by providing access to more listings, handling negotiations, and assisting with paperwork.
Without a Makler, you can find properties via online portals or newspapers, but it may take more effort and risk.
If you do use a Makler, they usually charge a commission between three and seven percent of the purchase price (plus VAT), depending on where you are in Germany.
Since a 2020 law reform, Maklergebühren (broker fees) are generally split roughly 50/50 between the buyer and seller for residential properties, meaning that you as the buyer will usually pay about half of the commission fee – although this can vary if only one party has a contract with the broker.
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Key financial terms to know
- Hypothek, Immobiliendarlehen and Immobilienkredit
There are several distinct German terms related to mortgages and property financing, each describing a different aspect of the lending and securing process.
The term Hypothek refers specifically to the legal mortgage lien placed on your property. It serves as the security or collateral that guarantees the lender can claim the property if you default on the loan.
The terms Immobiliendarlehen and Immobilienkredit are used interchangeably and refer to the actual loan itself – or the sum of money you borrow from a bank or financial institution to purchase the property.
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When you enter a financing agreement (Finanzierung), you secure funds in the form of an Immobiliendarlehen. In return, the bank formally registers the Hypothek on your property as a protective measure.
Additionally, the term Anzahlung is used to describe the down payment or deposit you pay upfront on the property, which reduces the total loan amount you need to borrow through the Immobiliendarlehen.
Foreigners often face stricter mortgage requirements such as proof of regular income, a good credit score, and a minimum Anzahlung (often 20 percent). Banks may require additional documentation or guarantees from non-residents.
- Zinsen (Interest rates)
Mortgage interest rates vary according to the length of the loan, type, borrower profile, and macroeconomic factors, but currently range between about three to five percent in Germany.
Sealing the deal
Once you find the property you want, it’s time to make an offer (ein Angebot machen).
Some real estate agents in Germany charge buyers a ReservierungsgebĂĽhr (reservation fee) to hold a property for a certain period, usually around five to ten percent of the expected commission.
If the reserved offer is accepted and a purchase contract is signed, the reservation fee is typically credited against the final commission the buyer owes the agent.
However, if the buyer withdraws from the purchase, the reservation fee could be forfeited depending on the agreement.
Court rulings in Germany have declared these reservation fees unlawful or unenforceable in certain cases and many reputable agents avoid them as a result. Buyers are advised to seek advice before paying any reservation fees.
- Der Notar / Die NotarinÂ
The Notar, or notary in English, is a legal official who acts impartially to certify the sale contract (Kaufvertrag) and oversee legal formalities. The notary does not represent the buyer or seller exclusively and is usually chosen by mutual agreement or by the buyer.
Auflassung (conveyancing) is the formal legal process whereby the buyer and seller declare the transfer of ownership before a notary.
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Typically, this will take place at an appointment during which the notary also reads the contract through from beginning to end in the presence of the seller and buyer (or their legally appointed representatives). Then, if there are no objections, everyone signs the document.
- Grundbuch (Land Register)
The Grundbuch is the official land register recording property ownership and rights in Germany. The Notar is responsible for having the name(s) of the new owner(s) filed in the Grundbuch following the Auflassung. This procedure completes the legal transfer of property.
Additional costs when buying a property in Germany
There are a number of additional costs to bear in mind when buying property in Germany. These include:
- MaklergebĂĽhren: Real estate agent fees, about three to seven percent of the purchase price, typically split between buyer and seller.
- Notarkosten: Notary fees for drafting and certifying the purchase contract, around 1.5 to two percent.
- Grundbuchgebühren: Land registry fees for registering the property ownership, usually about 0.5 – one percent.
- Grunderwerbsteuer: A property transfer tax paid by the buyer. The rate varies from state to state, from 3.5 percent in Bavaria to 6.5 percent in Brandenburg, North Rhine-Westphalia, Saarland, Schleswig-Holstein, and Thuringia.
EXPLAINED: The hidden costs of buying a house in Germany
In total, buyers should expect these fees to add about ten to 15 percent on top of the actual price of the property.
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