Buying a house (in Waldshut)

35 posts in this topic

Posted

Hi all

we have plan buy house in waldshut ,just don't know about rules in Germany .agency which show house to us send this email , I would like to ask is that true?all fee & tax should be pay by buyer?

Regulary you have pay for agency 3,57% of the price of the house.

The "Notar" get round about 1,6% of the Price of the house as fee

The finance fee is also 1% of the finance amount

5% are in Baden-Württemberg the stately fee for buying a house

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Posted

Here are the Costs that I incured recently...

If you are taking a loan from the Bank, I think you have to pay a bit more, seperately invoiced as the Bank will need their security ( A %age of the property) notarising into the Land registry doccuments!

The only one that could really screw you over is the Estate Agent!!

The Other Guys are quite well regulated!

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Posted

The only one that could really screw you over is the Estate Agent!!

The Other Guys are quite well regulated!

thanks for helpful answer so you think agent takeing too much? I was thinking same 3.5% is too much .what can I do?

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Posted

That seems to be the going rate and its probably regulated... but he could then add other things in there such as his travel costs and advice etc...

The alternative is to find a place for sale without an agent!

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Posted

it's problem we living in Switzerland * don't know how we can find a property without agency. can you help me how I can do it?

here is more detail

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Posted

all fee & tax should be pay by buyer?

Regulary you have pay for agency 3,57% of the price of the house.

This is the standard rate for the agency in Baden-Württemberg. This is also ruled. The rate can be at max. 6% which is in Baden-Württemberg shared half/half by the buyer/seller. Thus 3% plus 19% VAT equals to 3,57% for the buyer.

Note that they have correctly written "regularly" - this is negotiable. Depends however on the local market situation.

There are some German federal states where the going rate for the agency which the buyer has to pay is even higher. But none where it is less.

The estimated fees for the notary and land register are correct estimated and include the fee for the entry the bank will require to secure their loan. This position consists of various different fees - but this is all strictly regulated.

And the real estate transfer tax is in Baden-Württemberg indeed 5%.

However not sure what they mean with finance fee.

The funding with the 2 loans (KfW and guess a local Sparkasse or Volksbank) is also standard. For a house purchase founded to 100% by loans the conditions are good.

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Posted

this is part of loan payment which loan will be finish during 35 years .can we pay more monthly & finish it sooner? & I didn't understand how many percent is bank interest for this loan? 2.60% or 2.60+2.63+1.83 ( I want to count how much finally we should pay all for this 250 000)

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Posted

& I didn't understand how many percent is bank interest for this loan? 2.60% or 2.60+2.63+1.83 ( I want to count how much finally we should pay all for this 250 000)

You do realise that at the Notars appointment, you are supposed to have a trranslator with you or at least have the VerkaufsVertrag ( sales contract) translated so that you fully understand what you are getting or letting yourself in for!

As for How much you will be paying over the next few years... ???

Well, you will probably need this!!

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Posted

bank loan 200.000 Euro

Sollzins (borrowing rate): 3,98%

Effektivzins (effective interest rate): 4,05% (that's the one you have to look at when comparing loans)

Anfänglicher Tilgungssatz (initial repayment rate): 1%

Optionales Sondertilgungsrecht (optional extra repayment rate): 5% per year as long the "Sollzins" is binding (10 years)

Tilgungsbeginn (start of repayment): 31.03.2013 (not that with the KfW loan repayment start only after 1 year)

Sollzinsbindung (how long the borrowing rate is fix): 10 years

Rate (monthly rate): EUR 830,00

Kalkulatorische Vertragslaufzeit (estimated duration of this loan treaty): 40 years 6 months (assuming no interest changes after 10 years and that you do not use the option of extra repayments)

The most important figure is that you have to pay from the 2nd till 10th year monthly EUR 1.014,58 for both loans together (interest and repayment). In the first year a bit less as repayment of the KfW 50.000 EUR loan starts only after 1 year.

After the Sollzinsbindung of 10 years the borrowing rate becomes flexible ("usual market rate"). But you can make any repayment any time.

can we pay more monthly & finish it sooner?

You can negotiate a higher initial repayment rate. But do this only if you will really have every month more than the EUR 1.014,58 free income left for this. Otherwise you can repay with the 200.000 EUR bank loan additionally every year up to 10.000 EUR. But not monthly as the minimum optional repayment rate is 1.250 EUR. You can however not transfer the repay sum not used in one year into the next year.

I didn't understand how many percent is bank interest for this loan? 2.60% or 2.60+2.63+1.83 ( I want to count how much finally we should pay all for this 250 000)

Note that you are quoting figures from the KfW 50.000 EUR loan. But the repayment plan is for the bank loan of 200.000 EUR.

My recommendation

1. If you have spare money use it to repay the up to 10.000 EUR per year with the 200.000 EUR bank loan.

2. In the 8th or 9th year get in contact with your bank and negotiate a new loan replacing the current one. What to negotiate will depend on the interest situation and your personal financial situation. E.g. if you have used your optional repayments and have still money you can decrease the sum of the new loan at this point even further.

3. If you're not happy with the offers of your bank you can ask any other. They will offer you a new loan as high to repay the remaining amount of the first loan after 10 years at once. Will add however some fees for the land registry to transfer the loan entry to the new bank.

To count now how much you will finally pay is a useless exercise. Albeit normally even listed at the bottom of the repayment plans. Everything after 10 years is a pure guess. With the above explained steps you can accelerate but also delay the repayment. My advise is to pay back such loans in a time frame of 20 to 25 years. As long you don't buy something which you cannot afford this is a realistic aim.

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Posted

this is part of loan payment which loan will be finish during 35 years .can we pay more monthly & finish it sooner? & I didn't understand how many percent is bank interest for this loan? 2.60% or 2.60+2.63+1.83 ( I want to count how much finally we should pay all for this 250 000)

Your €200000 loan will not be finished in 35 years, it will be finished in 40 years + 1 month as it is written in your contract, if the interest rate remains fixed at 4.05%. With this parameters, you'll have paid €410000 by then, or more than twice the original amount.

I wrote a small Matlab program to simulate my own costs some time ago, instead of relying on some seller's excel table. With the fixed rate of 4.05%, you have for varying monthly payments:

830 Eur: 40,1 years, €410000

1030 Eur: 25,5 years, €324000

1230 Eur: 20 years, €289000

1430 Eur: 16 years, €270000

I also negotiated a high (%10 of the loan) sondertilgung, or yearly one time special payment. A high sondertilgung will normally increase your interest rate a bit (they want to make money somehow and have to compensate a little for giving you the chance of repaying the loan quickly) but can be worth it if you expect to save a significant amount of money a year but don't want to commit. You can also (and should) make sure the contract includes the possibility of changing the monthly tilgung (i.e. your monthly rate) to a higher or lower value 1 to 3 times a year for free or for a nominal fee.

I'd seriouly recommend you study the matter more deeply before commiting to a purchase. Financing is complicated (unless you're part of the significant number of people don't mind losing money and being ripped off by banks because they don't even realize it), buying a house in Germany as well, and you don't seem to be at ease with either, which is really, really calling for trouble.

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Posted

Thank you so much abalada

you help a lot as a close friend who don't know anything about Germany :) we don't have problem for paying more than 1000 euro (we already paying 1500 for a small studio in Zürich) which even is not ours and is not like what we like!

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Posted

I'd seriouly recommend you study the matter more deeply before commiting to a purchase. Financing is complicated (unless you're part of the significant number of people don't mind losing money and being ripped off by banks because they don't even realize it), buying a house in Germany as well, and you don't seem to be at ease with either, which is really, really calling for trouble.

thank you so much for good warning ,yes is really complicated & I should learn more before buying , I think is better pay monthly for your house instead of some rent which is never for you and you will pay money which never back to you

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Posted

thank you so much for good warning ,yes is really complicated but I think is better pay monthly for your house instead of some rent which is never for you and you will pay money which never back to you

That's a naive argument as the wiseness of buying instead of renting really depends of many factors, such as where you're buying, what you're buying and how you're paying. In most cases, it makes more sense economically to rent in Germany and invest your savings in bonds, etc. There are numerous discussions about this in this forum which you can check.

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Posted

Before you increase your loan repayments don't forget to factor in the Hausgeld, which depending on the size of the property could well be another 500 EURO a month.

The Notar will not let you sign the contract if he does not think that you have understood it. As I am not German, he added the following line to our contract: "Die Erschienene 2) ist hinreichend der deutschen Sprache mächtig" which I imagine was to cover himself should I at a later date claim not to have been able to speak German at the time that the contract was being signed.

Whether or not you buy or rent is a personal decision that only you can make so I will not comment on that.

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Posted

I concur with Mtbiking and would put a big question mark behind the economic reasonability of the financing. The unfavourable facts I see are:

– Your down payment of 16,000 euros is very low. I assume you are planning to use the house for yourself? In that case, a higher down payment is better and would get you significantly better conditions for the loan; if on the contrary you intend to let the house, a low downpayment can make sense, since the costs for the interest can be deducted from tax.

– The repayment rate of 1 % is very low. It is better to repay faster, e.g. with a rate of 2 %.

– The interest rate of effectively 4,05 % for the 200,000 euros loan is rather high, are you sure that is the best offer you can get? When running your data through the calculator on the Interhyp website, I get 2,45/2,48 %. Of course this rate is based on the assumption of impeccable credit worthiness (Bonität) and a higher down payment, factors which reduce the risk for the bank. Still, I would recommend using a financial intermediary like Interhyp, which compares a broad selection of offers and guides you through the process of application for the loan.

– The economic rationale of buying a house in Waldshut for overall substantial costs is uncertain, to say the least. Just think about it: In those first ten years, you will pay roughly 75,000 euros of interest alone for the 200,000 euro loan, while only having repaid around 27,000 euros at the end of that period. You are committing yourself for a very long time for the benefit of once owning a house in a lovely, but small town. Chances are that you won't stay in Waldshut for that long, so you will have to let the house. How is the demand in this area? What are the prospects in case you want to resell the house prematurely? Getting at least the costs of the investment back is not guaranteed, let alone a profit.

IMO, if you are set on acquiring property at this point at all, you should look into buying a small apartment in an attractive city with good demand for rental objects (e.g. with a university) and benefit taxwise from letting it.

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Posted

RainyDays is spot on.

It's painfully clear to anyone that knows what they're talking about, that you really have no clue and are setting yourself up for a disaster.

You have no idea what you're getting into and I'm pretty confident in saying you're making a big mistake. Rent a house until you have a grasp on what you're doing.

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Posted

Try and avoid the agent's fee, advertise in the BZ or Süd Kurier, state what you are looking for and where and a max price, thus you save the high agent's fee

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Posted

Im inclined to agree with Huthco. When we first started to look for a house to buy almost 2 years ago, we thought we could afford much more than we really could. This is even though my husband is German and understood more of financial matters than I did. He had never bought a property before so it was still unknown territory to him. Renting does give you the flexibility to explore the area better and to properly understand the financial implications. We ended up borrowing a similar amount to yours though even with a 15 year fixed rate of 2.7%, the restschuld (remaining balance) is just over 50% which would have to be financed again at who knows which rate it will be at the time. Sorry I didn't read every post here but the Grundbuch and Notar fees here are approx 3% of the purchase price plus 5.95% agent fee (including 19% mwst - tax). It's different all over though we managed to negotiate the agent fee down to 3% including tax. If property is hard to find where you are looking then negotiating fees will be quite difficult if not impossible. Again, if you rent in the area you think you would like to buy, then you literally tell everyone you come across that you are looking to buy and you might just strike lucky. We did that and ended up buying our house across the road from our rented flat. Sadly we couldn't avoid the agent fee as the owner was a bit reclusive and didn't want to deal with prospective buyers directly. If you rent modestly for a while you could save more for your deposit. I think his will give you better borrowing rates if the loan to house value is lessened.

Good luck and brace yourself for a longer process than you might have imagined. It is likely to be worth the wait.

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Posted

than you so much to all nice friends for answering , you can't imagine how much help your suggestion to me.of course I asked here that I know more detail & info about loan issue in Germany and I got what you mean

about mtbiking said about investment on bonds , I'm agree ,for sure if I had this 250 000 in cash (or even some part like 100 000) I never give it for buying a house ,we are talking about 100% loan from bank which I know it has more interest and profit for bank as well. We count during this 45 yrs which loan will be finish (if we don't want make it shorter because I don't know I'm still alive after 45 LOL) we will pay less than all we should pay for rent!

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Posted

That's.. just not how it works. Look at your own table, or read what RainyDays said. With your proposed payback rate, you'd be paying mostly interest for a possibly devaluating object for decades. In many places in Germany, and I presume in Landshut this is the case as well, you can rent a nice place for less than the amount of money you're paying in interest. So in the end instead of having paid €200000 to the bank and owning an old house, you'll have paid a certain sum to a landlord and invested the more than €200000 in fonds over time. In this simplistic assumption I did not include the other costs of owning, like house repairs, that are not your problem when you're renting (and your Landlord can deduce those costs from his taxes, which you can't as a house owner living in your own home).

Please, please read the threads about it and/or take an Economics 101 lesson before comitting to buying something as expensive as a house.

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Posted

We count during this 45 yrs which loan will be finish (if we don't want make it shorter because I don't know I'm still alive after 45 LOL) we will pay less than all we should pay for rent!

Are you planing to let your kids pay your house off, once your no longer living? That seems really harsh. Would be interesting to know why the present owners are looking to sell the house. A little tip: the population is going down - more and more people are moving towards the cities. If your deadset on buying, go in that direction. If you do decide to sell at a later date, for what ever reason, the sell would be eaiser and the value of the house would not decline as quickly as in an area that people are leaving. A good example is Eastern Germany. They have streets and houses that have never been lived in or hardly driven on because the jobs left and so did the people. They can't give some houses away, because no one wants to live there.

Not wanting to pay rent is not really a good reason to buy. The germans say, the only thing free is death and even that costs you your life. "Umsonst ist der Tod, und der kostet das Leben "

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Posted

Sounds as if the OP should consult Starshollow...

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Posted

Sounds as is the OP should forget about buying a house.

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Posted

If you are dead set to buy be also aware of that there are so-called Bausparkassen which offer loans with no risk of change in interest rates (usually to be paid down within 25 - 30 years, so your monthly installment will likely be higher, but you will have it off your neck earlier). Many banks will do that as well nowadays. Given the risk of an interest rate much higher than now in 10 years and the current low-interest rate environment I would definitely look at that. If I really wanted to buy and not rent. Which is a big if. However, I did it - and though I am sure I would lose money if I sold my home today (for the reasons stated above - rural aread with declining population) I never regretted it. There is a huge emotional dividend (for me at least) which doesn't show up in any spreadsheets.

Be also aware that your interest rate should go down if you increase your yearly repayment rate.

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