To say that purchasing real estate in Germany is a good investment is an understatement. This is one of the wealthiest countries in the world, not to mention the most popular. With a stable economy and great tourism, having your own
property in Germany will benefit you a lot. But before you can reap the rewards, you need to go through the process of purchasing it first. And it's not exactly a walk in the park. Buying a property in Germany can get pretty complicated at times so if you want things to go as smoothly as possible, let this real estate guide help you!
Can a Non-Resident Buy A Property in Germany?
As you may already know, Germany has become one of the most open and liberated countries in the world. You may still need to get a
Schengen Visa to get here, but it doesn't have extremely strict borders like the rest of the world. So it makes sense that foreigners, even non-residents are allowed to purchase real estate in Germany. There are no laws that restrict ownership of any property in this country. And the only time that your residency status may pose an issue is when you apply for a mortgage loan here.
What Should You Look For in a Property?
Remember that real estate in Germany—or anywhere else, for that matter!—can get pretty expensive. So whatever property you buy here ought to fit your own standards. There are a lot of things you should
look for in a property. From its location and the nearby facilities to how secure the place is from the outside. These are just some that you have to watch out for. Consequently, it's also these things that will determine the true value of the property. They're all part of the valuation surveys you need to conduct during the purchasing process.
What Are The Costs of Buying Property?
Buying a property in Germany comes with a number of costs. According to
Expatica, they include the property transfer tax (
grunderwerbssteue), notary fees, registration fees, your
real estate agent's commission, and the VAT. Luckily, many of these are paid through percentages from the property value. But some you have to pay on top of the final price. And it's also important to note that the property tax rate you have to pay will depend on the region where the real estate is located. In Bavaria, for instance, it's 3.5%, while in Berling, it's 6%. The differences are bigger than you think!
How Do You Make an Offer to Buy Property in Germany?
Let's go back to the topic of valuation surveys for a little bit. In a nutshell, a valuation is done to determine the true value of a property before they go on sale. This is how the seller reaches an initial asking price as they put their real estate in Germany on the market. So when you approach them in the hopes of purchasing said real estate, you have to be careful with your offer. You'd do well to give a figure that's fairly near the initial asking price. Anything too low or too high will instantly turn the seller off!
How Do You Get a Mortgage in Germany?
Let's say you're
moving to Frankfurt and you want to purchase your own property here. Since the prices here range from €4,000.00 to €10,000.00 per square meter, you won't be able to pay it all in cash, right? You probably can't afford a place right now. So what do you do? Get a mortgage! Applying for a
mortgage in Germany is actually fairly easy to do. All you have to do is follow their instructions, submit the requirements, and wait for the approval. If you're lucky, they can allow you to borrow up to 80% of the total property price. But that's only if you're a resident. If you're a non-resident, you can only borrow up to 60%.
How Do You Set Up the Sale & Purchase Contract?
One of the most important steps in purchasing a property in Germany is signing the sale & purchase contract. You can have your notary draw it up, have both parties sign it, and it will officially start the transfer of property ownership from the seller to you. This legal document will bind both you and the seller to the sale. On your end, you'll have to pay the seller a deposit of around 10% to 30% of the final property price. While the seller will have to take the property off the market and only sell it to you!
What Are The Different Types of Ownership Structures in Germany?
Here in Germany, there are three different types of ownership structures. And if you have plans of buying real estate here, you ought to know about them! The first is full ownership, the type that reserves all the rights of the property to the legal owner. The second,
Miteigentum, is all about co-ownership. In this structure, two or more people share the legal rights to the property equally. And third is
Wohneigentum, pertaining to condominium ownership. When you purchase your own flat in Germany, you will essentially share the ownership rights with the Association of Owners of the apartment building.
What Are The Legal Issues in Buying Properties in Germany?
This real estate guide has shown you that there are
many legal issues that come with purchasing real estate in Germany. You already know about how foreigners are allowed to own property in Germany, the various ownership structures that the country recognizes, and even the legal binding of the sale & purchase contract. There's also the issue of the liability of misrepresentation. If, for instance, a problem is discovered in the property after the purchase, the liability falls to you as its new owner if you can't prove that the seller (previous owner) didn't know about it during the sale. But if you can, then the liability falls to the seller.
How Long is The Process of Buying Property in Germany?
The length of time it will take for you to buy property in Germany depends on various factors. For example, if you or the seller (or both!) aren't 100% prepared at the start of the process, then it's guaranteed to take a long time. More often than not, it's the gathering of various documents that takes up a whole lot of time. If you're not careful, the process can easily go on for around six months, an entire half year! But if everything is fine, the process can be as swift as only two to three months.
How Do You Search Properties For Sale in Country?
The first step in buying a property in Germany is, of course, finding one. And in this day and age, your best bet is to go online. Many of
Germany's top property listing websites cater to international buyers. They come in both German and English and offer services that will specifically benefit non-resident buyers.
ImmobilienScout24 and
Immowelt are perfect examples. Whether you're in Germany or not and whether you understand German or not, you can easily access these property portals. Who knows? You might find your next dream home in any one of them!
What are The Best Tips for Buying Property in Germany?
Finally, let's end this real estate guide with
important tips that can help you purchase a property in Germany properly. Firstly, see the property yourself! Remember that you're investing a lot of money here. You owe it to yourself to see first-hand if the place really is worth your time and money. Secondly, it's better to set a move-in date in the important documents of the sale. At the very least, you and the seller ought to have set an agreed date as to when you can move into the property. This will avoid any embarrassing situations when the time comes!
Buying property in Germany is a great investment, which also means that it's that easy to do! To make sure that you don't commit any big mistakes while you take on this endeavor, let this real estate guide help you!
