Buying property in Germany
All purchases of property in Germany have to be supervised by a notary. Notaries carry out the legal work and contract obligations related to the real estate purchase. A notary charges a fee of 1.6-2% of the purchase price. You can also use a notarkonto account to transfer funds from buyer to seller, but then you have to pay a higher notary fee.
Procedures and fees
The purchaser of the estate also pays the property transfer tax (Grunderwerbsteuer) which is on average 3.5% of its price. In some states, this rate can be as high as 5%. Some people try to do an “arrangement” with the seller, under which a lower price is stated on the contract in order to pay a lower tax for property in Germany. However, if discovered both the buyer and seller can be subject to fines and even legal pursuit.
Once the sale is complete, the title deeds should be registered with the local land registry (Grundbuch), so the title can be transferred to the new owner. This process of registration and transfer may take up to 2-3 months.
Using an estate agent for property in Germany
You can use the help of an agent (Immobilienmakler) to buy a property in Germany. Unlike a notary this is not obligatory, but it is generally advised. Don’t sign any exclusive representation agreement which will oblige you to rely on the service of a single agent.
From the beginning, ask your agent who will be paying the commission in order to avoid misunderstandings when finalizing the sale. Usually, a sales agent’s commission is about 6% of the property price. You can try to negotiate that the seller pays the commission (since the agent is advertising for them), but in most cases the commission will have to be paid by you.
A (local) lawyer/notary will deal with the land registry (Grundbuch) and purchase contract (Kaufvertrag). The land registry will show if the property in Germany is free of old debts, e.g. mortgages. In shared properties (e.g a flat in an apartment building), you might have to sign a building declaration of partition (Teilungserklärung), which states all the obligations and responsibilities of each owner involved.