Buyer’s Guide to Purchasing German Property
Buying German property is a straight-forward procedure that has minimum risk and exceptional security of title. However the process is different and alien to most foreign buyers so for convenience we have prepared this familiarization guide. The first part of this guide consists of a general overview of the German real estate conveyancing system. The second part offers in-depth explanation and information. If you have any further queries then please contact us: email@example.com
A Brief Overview:
A sale of property is only legally recognised in Germany when authenticated by a German Civil Law Notary.
When you enter into agreement to purchase real property in Germany, be it at auction or directly with the seller; you enter into an agreement to complete a German property contract known as an authentic instrument of purchase.
An authentic instrument of purchase (or sales agreement) can only be executed in Germany and in the presence of a German Civil Law Notary. Of course the purchase may be done remotely through a German consulate or embassy, but ultimately this document must go to the notary in Germany to complete the process.
Civil Law Notaries are legal professionals appointed by the German State to ensure all property transactions are properly executed between the parties and comply with German Law to ensure a smooth transfer of title. The German Civil Law Notary represents the State in a property transaction, individual assignment of counsel by the parties are generally not required.
Properties sold through Sneddon & Lock are professionally managed by a property management company located in Dresden, Germany. Each sale includes 6 months of free management for the Buyer at no extra cost. After this period, this highly regarded service can be discontinued or continued at very favorable rates.
The property manager is charged to work with the Civil Law Notary to ensure that as the contract stages as summarised above are reached.
- Agreement to purchase signed and returned to the Seller.
- Buyer provides personal details (Full name, address and date-of-birth) as should be recorded with the Land Register’s office.
- An Escrow agreement is drafted and made live on Transpact.co.uk - A trusted UK Escrow organisation. Escrow protects buyers money until the transfer ow ownership is complete
- Upon completion of the above a Notary appointment will be made and a draft of the sales contract will be distributed.
- 10% is now transferrable to the property manager for conveyancing costs (See breakdown below). Bank account details will be emailed to the buyer
General Cost Estimate on Conveyance Costs:
- 3.5 % - 6.5% of purchase price for German property transfer tax (Stamp Duty). “Grunderwerbssteuer”.
- Approx 1.5% of purchase price for the notary’s fees. (The notary’s fees are governed by statute.)
- Various disbursement fees for the land registry and search certificates from local authorities. These certificates vary from around 5 Euros to approximately 70 Euros. No more than 4 certificates are usually required.
- £100 fee for the German Agent to represent the buyer in signing the deed of purchase in Germany, if required.
- The cost of maintaining the management account (approx. 100 EUR) monthly after the free 6 month period has elapsed. We provide 6 months free property management, this is optional of course, but the benefits are clear
Once the Property Manager has been contacted by the Notary to inform the parties that the sale is now legally registered the Property Manager will make arrangements with the Buyer to handover the keys to the property and ensure all related utilities and services are properly handed over.
The transaction is at this point complete and the Buyer will receive a printout of the Land Register extract which shows the legal transfer of the property has been effected.
At this point both parties agree that the process is complete and that the payment held on Escrow with Transpact is complete, this payment can now be disbursed.
The Buyer can expect the economic transfer of the property to occur within 6 to 8 weeks of the purchase agreement execution.
Note the following:
- The property cannot be used or resided in by the buyer until ownership entry is complete in the land registry. We have been asked before if it would be possible for the buyer to take immediate possession, but this is not and never has been possible without other instruments being put into place first, insurance being a concern amongst other things.
- The role of the property manager has proved invaluable for our current clients, see our property management page for more info on this service.