It’s a good thing that you decided to buy a home for yourself. And Right now is a very good time to buy a home, as the interest rates are very low.
For us foreigners, it is a big day when we finally buy our own home in the foreign land. I remember how excited we were when we got the keys to our apartment.
Following are the points to keep in mind when you are buying a property in Germany.
1. Decide what kind of property you interested in
Independent House, Row House (Reinhaus), Apartment (Wohnung), old or new.
2. Decide specific region, city, or area where you would like to live
Choose an area where you and your family both feel comfortable living and commuting.
If you are a commuter or dependent on public transport, also check for the train or highway connectivity.
3. Decide the budget
You should consult Finanazberater to get the Idea, how much you can afford.
You should get a loan from appx. 100 times of your after-tax salary (Example: for 3000 € net salaries, you can get a loan of 300,000 €), but you should have extra cost (nebenkosten) in your bank account
Nebenkosten: Broker commission (Maklerprovision) + Tax (Grunderwerbsteuer) + Notary (Notarkosten) + Property transfer cost (Grundbucheintrag)
4. Start looking for an object on different websites and apps ImmoWelt, ImmoScout24, MeineStadt.de
5. If you find anything you like, contact the seller or broker immediately and ask for an appointment to see the place. If the property is in a nice location with a decent price, it will sell faster.
6. If you like the House or Apartment
…and if it is old, please check the following: when was the last renovation or pending renovation if any, energy efficiency, hot/cold water, internet speed, Mold formation. Any in near future pending renovations you can find out in the last 3-4 “yearly residence meeting transcripts” (“einwohnerversammlung Protokoll”). This you can get easily from the seller.
If you don’t know/understand how to inspect the old building, you can also hire a professional building inspector, who can give you a detailed report about House.
…and if it is new – in the construction phase, ask for changes, if you want something different, internet speed, water, and energy, what kind of interior is included (sometimes you will get an empty bathroom without anything or the entire home without flooring, etc…)
7. If it is your first home and you are planning for you to live in, then you are eligible for the “KfW Home Ownership Programme” for a loan up to 100,000€ at very low-interest rates.
8. Also, if you are buying new homes that are built energy efficient, you can get a loan from KFW up to 120,000€ with low-interest rates.
After the loan is finalized, you can make an appointment with Notar for contract signing.
A notary contract is a pretty much standard. The apartment/House should be in livable condition and with no big unknown damages.
There are some points to note here.
- Handover Date
- Loan Payment Date
- If the Handover date is not the same as the loan payment date, then you can ask the seller for reimbursement, as your loan will start from the day your bank transfers the money out.
- If the previous owner is leaving some furniture behind, then you can put the value of that stuff in the contract. The benefit of doing this will be you pay the tax on the property value – the value of stuff. Let’s say you put 10000€ on the value of the stuff then you will save 6% of 10000€(600€) in taxes.
After the contract is signed, all you have to do is wait for the bills to come in the post and Pay as they come and tell the bank in writing a couple of weeks before your payment date, when and to which accounts, how much money should be transferred.
Remember this should be done in writing to your bank. You should get this information from the seller at least a couple of days in advance.
Wishing you all of the happiness in the world as you settle into your new home. Cheers to new beginnings. Congratulations on your new home!
We are not professionals but we have experience in this matter so thought of sharing these steps to help people out, but you should consult a Finanazberater and/or a Bank for loan processing. After all, we are happy to help if you have questions.