The following purchase formalities apply for Berlin. For the other places where we advise different sets of purchase formalities are applied in order to successfully complete a transaction.
The purchase process in 4 steps:
1. Make sure that you know what your financial budget is.
Do you finance the transaction with your own capital? Then make sure you have the funds available on the date of the signature of the purchase contract. If you wish to (partly) finance your property with third party finance, then contact your bank or intermediary upfront and obtain a pro forma quote from them as to your financial possibilities. Before we start our search we will ask you about this.
2. We start our search on internet and via our own network.
A lot of properties are not disclosed on internet but kept in a discrete portfolio as owners in Germany often do not want to flag that their properties are for sale. Once we have found properties, which we think you will like, we visit them together with you and, if you want to pursue a transaction, we negotiate the price and the seller’s agent commission, where possible. The seller has normally engaged his own real estate agent, but be alert, his commission is normally for your account! As our fee adds up to the total cost of your property we try to negotiate a reduction in commission of the other real estate agent.
3. Often the seller will only wish to sell to you, and enter into the legal execution of the transaction, if he is sure that your financial credentials are sound and safe.
Make sure you managed step 1 therefore very well. As it may take up to between 1 and 2 months before the purchase can be executed by way of the official purchase contract to be signed before a notary, the seller may wish to bind you to buy his property. He will do so by asking you to make a reservation or take an option on his property. He will charge you a reservation or option fee, which is forfeited if you finally dont sign the official purchase contract. The fee may be between 4.000-10.000 Euro, depending on the type and price of the property. The reservation and option fee is returned if you sign the official purchase contract.
4. After two months since you reserved the property, you have managed, from banks if you wish, to have all the funds available to execute on the property transaction and we go together with you to the notary who has prepared the (draft and ) final purchase contract and possible mortgage contract.
You have between two and four weeks after presentation of his first draft contract to finalise and sign the final contract in presence of all parties. The cost of the notary (normally 1,5% of the naked purchase price, non negotiatable) is normally for your own account. In addition, there will be the levy of property transfer tax (6% of the naked purchase price). In case of an existing property, you get the keys of the property. If it concerns a new property, you will get the keys once the property is ready. The notary takes care of registering your property and mortgage loan. And finally the property is yours!
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