Various advice on buying a house in Germany

I intend to buy a house near Flensburg in very near future and I would very much appreciate some advice on a number of matters:

1. I will need to transfer a very large sum of money from my UK bank to pay for the house outright and my intention is to use 'Moneycorp' FX for this purpose. Should I transfer the money direct to the agent/solicitor here or would it be better to transfer to my German bank account first and then transfer the payment to the agent/solicitor?

2. I'm familiar with house buying process in the UK but not so here in Germany. Do I need to engage a solicitor to carry out the equivalent of the conveyancing process ( land registry searches etc), or is there a different system here?

3. I intend to have the equivalent of a structural survey carried out on the house before committing myself to the purchase. Any thoughts on this?

4. Finally, and there's not a lot I can do about this I know but, any thoughts on the current poor Pound/Euro exchange rate?

Any help/advice on these and any other related issues greatly appreciated

cruiser

Note that under UK law most of the brokers are regulated but you have NO insurance if they go bust and no compensation. Therefore if you were very unlucky and they went bust during your transfer, you lose the lot. Happened about 2 years ago in the UK with an East End London broker for the Asian community. They lost millions.

N.B. I do use brokers, but tend to split my exchanges on the really big stuff to limit the risk.


Ummmmmm. Looking crap for you unfortunately. Was hovering around 1.48 for ever but now 1.33 level. The next UK interest rate move is down (probably in Feb), so that is not gonna help. sterling has been caught in the $ versus €uro crossfire. Just gotta bite the bullet and ignore it. It is what it is.

Edit: Moneyorp have been around since 1979 and I think part owned by RBS so they look about as strong as you are gonna get!!

Good luck with it, we buy/sell a great deal of property in Germany so advice here is from experience, if you buying cash is much easier than buying with a loan, if doing a large trans we use a specific broker who guarantees the best rate over even money corp etc and there are no fees to pay, this is important as many German banks charge a huge fee to accept your money, if you send me a PM I will put you in touch with them, we do a great deal of business with them and always found them to be excellent and the fee savings are huge.

As for the Lawyer bit, it is not nessasary to use a lawyer and again will save you a huge amount if you don't need one, if you are buying a house should be pretty easy, but the purchase contract has to be signed in front of a Notary (the law in Germany) but as buyer you decide on which Notary to use (and of course as buyer, you get to pay his fee as well..) take care though as again fees for Notar's not cheap around 1% so shop around...you may want to look at using a Notary Trust account to deposit the money into, this is like an escrow account or holding account only the Notary can touch the money and if the vendor fails to perform (but I doubt that) the Notary can return the money to you, it the safest way to do it...

Survey is a very good idea if you are buying a house, suggest you get one with English translation built into the fee, guys we use in Berlin work on a hour rate of about €200 ph and €500 to produce the report in English so cost for a building of say 15 flats is around €1,500 + vat so for a house should be a lot less.

Other costs to look out for are the Land Transfer Tax (stamp duty) at 3.5% outside Berlin 4.5% inside Berlin, Agents fees standard 7.14 inc vat, Notary fee 1% + vat in most cases, we tend to have the Notary contract construced for our clients where the Notary can pay all these costs form the Notary trust account and clients do a transfer for the whole amount of the property and costs, is much easier, and difference the Notary pays back to the client, but you need to agree this with the Notary in advance so they can write it into the contract.

Things to look out for...make sure you have the money in the Notary trust account well ahead of the agreed completion date as if you miss the completion date in very very small writing in the contract the vendor will be entitled to penalty interest at a massive rate ie 5 or 6% above base...and that hurts a lot...shop around for a Notary if you have time pop in to meet a few, go with one you get on with not the cheapest...

If you send me a PM I will email you my contact details feel free to call me for a chat.

John.

there is a different system in that there is a cadastre which records exactly who owns what land in the so-called "Liegenschaftsbuch", which includes links to the map/land survey part ("Liegenschaftskarte"), rather than the deeds system in the UK which only really records the transactions and not who owns what. Registration of ownership in the cadastre is basically a legal guarantee as to who owns what land. The searching is therefore theoretically a lot simpler since you just need to ask at your local Katasteramt for the relevant info (you need to show a "berechtigte Interesse"/valid interest in the info in order to get the details of ownership from the Liegenschaftsbuch - basically prove that you're seriously planning on buying it) which should then not require too much checking. The catch is that some parts of the cadastre are quite old (maps from the 1800s...) and therefore not necessarily accurate and there are also various other areas that may require some interpretation and checking. You will also have to register your ownership with the Katasteramt.

To be honest, although you could probably do it yourself then you're probably better off getting a solicitor to do it as they know the system and are less likely to miss anything important (and you can sue them if they do!).

That would be the Grundbuch at the Amtsgericht (or Notary in some Länder), not the Kataster.


That is in fact at the Kataster, but...


that is only true for the Grundbuch. The Kataster doesn't register owners. They might have an owners registry, but only the Grundbuchamt's registry is binding.


Again, Grundbuchamt and you only legally own the lands once you are registered in the Grundbuch, not after you signed the contract and not even after you paid the money.

p.s. as for shopping around for notaries. Notary fees are set by law and won't vary.

German Land Law ...

I have used moneycorp on two occasions (not for such large sums as you probably will). Be aware that you have to register
with them first & supply proof of identity. Do this well up front.

Cruiser: since you are a resident and tax-payer in Germany you can get decent financing for the purchase of real estate. What "office" above mentions quite correctly are the problems that foreign investors without residence in Germany face when trying to get financing for their intended investment. Underneath investment amount of 1 million EUR or more it is very hard to get decent LTVs in excess of say 60% for foreign investors (for larger investments LTVs of up to 80% are possible depending on the yield of the property from rental income). You as a resident should be able to get 80% LTV or more if you want, depending on length of stay in Germany and income/tax records. Should you need some help with setting up financing, try to involve an independent mortgage broker.

While you do not need a solictor for purchasing property as such in Germany, I find it recommendable in your case too since in the purchase contract there could be some hidden trapps and pit-falls hard to detect for someone not at ease with German legal language and there are always few bad some bad apples among real estate agents or property sellers. An independent broker with good English skills might be of some help, but you could not hold himn liable for any problems arrising out of the sales contract that he might have overlooked.

It is indeed wise to have the financing more or less set up before signing the purchase contract, on the other hands most banks only work with full dedication on a mortgage application if there is at least already a draft for the notary purchase contract. Besides a number of documents from and about the property are required for the bank to give out a real reliable confirmation of financing. Thus I would recommend that you arrange a small down-payment on signing the contract and about 3 month time to pay the purchase amount, usually enough to get everything through with German banks. Anything shorter than 6 weeks is dangerous. Having said that: the penalty interest "office" mentions above are not too bad when you look at it more closely, because at the same time you are not paying interest on the mortgage yet and when you deduct the amount due for mortgage interest the gap is not too wide, but still it is money wasted and should be avoided.

While I offer my independent mortgage broker services all around Germany, I am basically focussed on Bavaria, Berlin and Saxony. If you don't find any English speaking independent broker in your vicinity come back to me by all means if you want such a service, but my recommendation for you would to get someone at home in your area. Most brokers like me do not charge a consulting fee but rather get a commission from the banks which usually charge the lender 1-2% of the mortgage as costs anyway.

Cheerio

You need to transfer the money to the Notar's account and you will probably find that Moneycorp will only transfer the funds to an account in your own name, something to do with money laundering legislation so you will then need to forward it.

Be prepared though, I did exactly the same as you... no mortgage etc... and the Notar, who incidentally did the whole process in English for me and German for the vendor, passed on the transfer fees for transferring the money from his account to the vendors. When you're talking about large amounts the fees are high, mine was well over 1000 euros, there's not much you can do about this but I thought the warning might help.

Lazybum, thanks for the warning. What is this 'transfer fee' that you mention? Was this charge made for transferring the payment in Euros from the Notars account to the vendors?

BTW, thanks to everyone for the helpful replies so far.

You'll have to pay an extra fee (Hebegebühr) if you use the Notar to transfer the money. The higher the amount the higher the fee.

Is there another way to transfer the money, thereby avoiding this huge fee?

Well, theres always the "pay the seller directly" way. You don't have to use an escrow like service.

My wife has just spoken to the Notar's office and she was told that no such charge is payable for transferring the money

http://www.notarkammer-sachsen.de/taetigke...kaufvertrag.htm

Gesetz über die Kosten in Angelegenheiten der freiwilligen Gerichtsbarkeit (Kostenordnung) ... scroll down to § 149 Erhebung, Verwahrung und Ablieferung von Geld, Wertpapieren und Kostbarkeiten

That's right. You normally pay 10% of the purchase price when you sign the contracts at the Notar, like exchanging contract in the UK and you agree a date when the balance need to be paid by (like completion in the UK).
As far as I know (I've only done it once) you have to pay the money to the Notar who forwards it at the proper time to the vendor and he was just passing on the fee from the bank. I can't remember the exact amount, I think it was about 1300 euros.

Just found the bill... it was 1318.53. Worked out as about 1/3%

You need professional help.
Find an Anwalt. It is totally different to the UK (like everything else).
You need somebody on YOUR side!
In many parts of Germany YOU (the buyer) pay the Estate Agent's commission
(and that's just a starter).

Contrary to a couple of other Länder in Schleswig-Holstein a Rechtsanwalt can be a Notar as well ... so it might help to google for "Rechtsanwalt Notar Flensburg"