Buying property in Germany

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a lot of really useful information, thanks a lot to everyone contributing. An additional question: if I make an offer to the seller below the asking price and he/ she accepts, there is any way to "lock" his / her committment? In other countries you make an offer in written format with a check corresponding to 5%-10% of the offered price and a term for acceptance. If the seller accepts - formally- the offer then he/ she can get the money from the check, as advance payment of the purchasing price, and then the remaining money would be paid after the purchasing contract is signed.. If he /she has a second thought then he / she is forced to pay twice the value of the check to the buyer.If the buyer has a second thought, then the seller is entitled to keep the advance payment.

I understand this is not applicable in Germany, but there is any way to protect the buyer between the time the offer is accepted in words and the time the contract is signed? Or he / she needs simply to cross finger a better offer does not arrive?

Thanks!

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[adminmerge][/adminmerge]

 

Hey everybody, we decided to buy an apartment after a lot of looking. I have a question, this apartment will be rented for one more year because it is so in the contract. so I will not move until next March. What happens with loan that I will get from the bank? Are the zins the same for this year or because it will be rented they will see it as kapitalanlage and they will charge more zins? what happens wit my taxes next year?obviously this rent will be an income but I will also pay rent for one more year. Finaly can someone tell me what are the extra kosts beside the makler? I think that totally is about 10% extra but if someone has an experience It will be very helpfull

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you certainly are picking a good time to get a mortgage with mortgage rates at lifetime lows!

 

You mentioned the tenants will be moving, is this for sure or not as it can be hard to kick out tenants

 

Taxes, short answer gross income less expenses will be added to your income and taxed at your marginal rate. If you lose money than that will lower your income and you'll get a bit of a refund so make sure you keep track of all your costs, postage, mileage etc.

 

Extra costs: you'll get a bill for land transfer tax and such but 5% give or take a bit plus makler costs are reasonable (might be a bit lower)

 

I'd suggest using one of the mortgage brokers advertising here, Starshollow also does mortgages, we used him and are quite happy with the results.

 

There are loads of threads here with more detailed information.

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Hello, I'm hijacking this thread a little, there are so many on this subject I wasn't sure which one to write in. Anyway, I moved flat last year and my landlord recently decided to sell. I'm in the process of hopefully buying it but I think I may have been a bit stupid. We've agreed a price, I went to the financial advisor, she sent me off to collect the documents, and she has recently presented me with an offer that seems reasonable and affordable (I should mention it would be a 100% financing because I have no eigenkapital, I wasnt expecting to buy). So now I just need to give the go-ahead for her to do the whole schufa thing and get confirmation from the banks. Now we come to my stupid thing.

 

When I met with the advisor, she asked me if I had any loans. I told her about these three things I had, where I bought some furniture on finance and which I pay back monthly. She said if I was to pay these off in full then it would mean she'd have a greater pool of banks to ask about financing, so I've agreed to pay these off in full at the end of this month. So far so good. I didn't, however, tell her that I also have two credit cards. On one is a smallish amount that I could pay off in full at the end of october, the other is slightly larger - not excessive in my opinion but I wouldn't be able to pay it off it one go. I didnt tell her about them at the time as I had lots of questions and the discussion went off onto different things and it slipped my mind, it wasn't deliberate. Afterwards somebody told me that the credit cards don't count as loans though and so didnt matter anyway, whereas I would argue that surely they are a sort of loan? Now I'm worried that having got this far, my application may be rejected because I didnt disclose these credit cards but at the same time I don't know what to say, do I call the financial advisor and tell her I made a mistake and forgot to tell her about the credit cards, which makes me look like the total moron I am? Or do I just let the Schufa go through and see what happens? I really wish I'd said something earlier. Having got this far I'll be devastated if it doesn't go through. I freely admit to being naive and stupid. Does anybody know if I'm supposed to declare these? She didn't specifically ask about creditcards but still..

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I should point out that my schufa is actually good, it's not that I don't pay my bills, the issue is that i have two outstanding verpflichtungen that I didn't disclose and presumably the credit cards will show up when the bank do the schufa.

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Loz_adele, I think you might be worrying too much. The credit cards do show up, but not the exact balance on your card at that given time. What Schufa will show is your credit limit on the cards and the lender can see UP TO HOW MUCH you might have borrowed on them. Also, call the sales person (I hate calling them "advisors") and ask her about that for peace of mind--I don't see why you think that'd make you look like a moron. It doesn't.

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Ok thanks, that makes me feel better. I just thought that not disclosing a credit card might be grounds for having an application denied (I think this is the case in the UK but could be wrong) and I feel that, at such a late stage it makes me sound like an idiot to suddenly be like, oh by the way I forgot to mention I have credit cards. This wouldn't slip most peoples' minds in such an important process.

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Well I did what you said and just asked the advisor in the end and it turns out you were right :) Not that it matters though because apparently my Schufa score isn't very good anyway. I paid off some small outstanding loans I had as the banks requested so i now have no loans to pay but apparently my score still isn't very good and because they can't tell why, I have to request a detailed Schufa. I've never not paid anything so don't know why it's bad - the only thing I can think of is that I've been in my overdraft for quite a few months, but I didn't think this caused a mark on your schufa unless you went overdrawn on the overdraft, which i've never done, but I guess I must be wrong. Or could it be the fact that I even applied for the credit cards in the first place? I don't know. Anyway, becoming a homeowner is a bit of a long-shot for me it seems :( But thanks for your help.

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you certainly are picking a good time to get a mortgage with mortgage rates at lifetime lows!

Or you could argue that because mortgage rates have now been very low for very long, house prices have climbed very high.

Some years ago, despite the interests being then not as low as today, the purchase costs were lower, all in all the whole thing much less expensive than now...

 

Oder...?

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Hello,

     I wish someone could kindly advise on my case.

     After rounds of negotiation, my offer on the apartment was (verbally) accepted by the owner through the broker. The broker then sent e a notar order form which required me to sign and return. But before i had the chance to return the form, the broker called me again telling me that the owner has accepted a higher offer from the other party. I thought, both the owner and the broker shall honor what was negotiated and promised. Can i file a complaint to the broker in this case? This goes against my experience buying property in UK. Normally, once the owner agreed on the price, the broker'd stop any negotiations with other interested parties. On the other hand, i was not asked to put down a reservation fee 0.5 -1% of the agreed purchase price, was it normal not asked to?

     

cheers

Mark   

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My understanding is that until both parties sign the sale contract in the presence of the notary any of the parties can withdraw.

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1 hour ago, CMark said:

Hello,

     I wish someone could kindly advise on my case.

     After rounds of negotiation, my offer on the apartment was (verbally) accepted by the owner through the broker. The broker then sent e a notar order form which required me to sign and return. But before i had the chance to return the form, the broker called me again telling me that the owner has accepted a higher offer from the other party. I thought, both the owner and the broker shall honor what was negotiated and promised. Can i file a complaint to the broker in this case? This goes against my experience buying property in UK. Normally, once the owner agreed on the price, the broker'd stop any negotiations with other interested parties. On the other hand, i was not asked to put down a reservation fee 0.5 -1% of the agreed purchase price, was it normal not asked to?

     

cheers

Mark   

Even in UK either party can back out until exchange of contract which here is the equivilent of signing with the notary. Sad for you, but unless you can up your offer (which may still not be enough if the other party raises theirs), you will not get the apartment. Try to look on the positive side that you found out early rather than at the last minute. 

Good luck with finding somewhere that suits you

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11 hours ago, CMark said:

was not asked to put down a reservation fee 0.5 -1% of the agreed purchase price, was it normal not asked to?

Yes, that´s not how it works in Germany.

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I agree with Smaug.  Also, I bet if you wait a few more weeks the property prices will adjust lower to reflect the new economic reality.  You may be just as well off that you are not stuck with your pre-Corona price, even if you are missing out on that particular property.

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I'm not sure prices will go down or not due the stuff that is going on at the moment, at least not everywhere.
Looking at some areas, there are just not a lot of properties to buy and even if there are, the amount of people looking is higher.

If there are 6 houses a year on the market in an area and 50 interested parties and that number drops to 20 interested parties, it isn't going to change much. Unless the banks decide the objects are not worth the price and so refuse to finance the purchase, i can't see much changing. Even if the prices tank, i'd expect that to attract larger entities to snap things up.

When we have been looking people are not jumping on properties where we are, there have been a few flats that have been on the market for over 12 months before they were sold. houses tend to go quicker but even then, i've seen objects be available for over 6 months.
You have to get to know how things work where you are looking and get a feeling for the price vs what you get. As we were looking I was able to guess roughly where a given house was (in the post code in relation to Trams etc) by looking at the price or if the price didn't match the area, start thinking what was wrong with it.

If you missed out then it's just bad luck but until the contract has been signed at the Notary, both parties can back out.

It's not nice mind, to get that far and have the owner and the marklar still accepting viewings and offers seems a little unfair to me. by that point your fiances should have been cleared to the point where it as sure you can get the cash for the purchase.

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Conventional wisdom is that the Germany property market is overheated.

 

With Corona some people will be unable to pay rent. Some landlords will be unable to make mortgage payments. There will be short term protection, but we are going to emerge this less wealthy. Once there are more people selling than buying the bubble bursts.

 

So I would expect German property prices, especially in Munich to be lower by the end of this year. It could be as little as 20% or as much as 50%

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8 hours ago, MadAxeMurderer said:

Conventional wisdom is that the Germany property market is overheated.

 

With Corona some people will be unable to pay rent. Some landlords will be unable to make mortgage payments. There will be short term protection, but we are going to emerge this less wealthy. Once there are more people selling than buying the bubble bursts.

 

So I would expect German property prices, especially in Munich to be lower by the end of this year. It could be as little as 20% or as much as 50%

 

What if instead

- Interest rates are cut even more (going even negative)

- Real estate is seen even more as a safe refuge investment

 

Could there be instead a continuation of the bubble? I hope that the insane Munich prices go down as well, but I'm afraid we'll see a continuation of the post-2008 bubble...

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1 hour ago, UpToWick said:

 

What if instead

- Interest rates are cut even more (going even negative)

- Real estate is seen even more as a safe refuge investment

 

Could there be instead a continuation of the bubble? I hope that the insane Munich prices go down as well, but I'm afraid we'll see a continuation of the post-2008 bubble...

Doubt it.  There is going to be a lot of people who just lose their money and will have less to invest.

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