Purchase decision and processing

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My purchase decision and the right handling

The dream property has finally been found – now it’s time for the purchase decision and the transaction. This phase is all about putting the property through its paces before buying, securing the purchase contractually and preparing the transfer of ownership step by step. To ensure that everything runs smoothly, you should proceed systematically and consult experts where necessary.

Thoroughly check the property (appraiser)

Especially if you are buying a house or an older apartment, it is advisable to call in a building expert (surveyor). A surveyor inspects the property professionally and discovers hidden defects that laymen often overlook. He checks the condition of the building, looks for damage or renovation needs and compares the information in the exposé with reality. At the end, you will receive an expert opinion with a neutral valuation of the property, including an estimate of the current market value.

This way, you will know whether the asking price is reasonable. Common defects that a surveyor can uncover include asbestos in old building materials (dangerous and expensive to dispose of), mold infestation due to moisture, dilapidated electrical wiring (older than 30-40 years), outdated heating systems (which may have to be replaced in accordance with the new Energy Saving Ordinance) or wood pests and sponge infestation in the building fabric. Even less obvious points such as rising damp in the brickwork, subsidence cracks or heavy limescale in old water pipes do not escape a trained eye. The surveyor quantifies the expected renovation costs and thus helps to avoid nasty surprises – and subsequent costs – later on.

In addition to the structural condition, an expert also checks the value: using a suitable valuation method, often the income capitalization approach, he determines the fair value of the property based on the potential rental income and land value. This expertise provides certainty for your purchase decision and strengthens your position in price negotiations. Although good advice costs money – a detailed market value appraisal can cost between a few hundred euros and around 1-1.5% of the purchase price – this investment is almost always worthwhile, especially for expensive or old properties.

Remember: buying a property is a long-term and expensive process – you shouldn’t cut corners here. If you want to keep the costs down, there are also cheaper short appraisals that provide a more concise overview of the value (although they are not valid in court). Always make sure that the appraiser is neutral and qualified. A certified and independent expert guarantees an objective examination of your property.

Reservation of the property – sensible or not?

If you have largely made a decision, but would still like to clarify the financing or details, the question of reserving the property arises. In Germany, it is possible to enter into a reservation agreement with the seller or estate agent so that the property is not sold to others for a certain period of time. A reservation fee is often charged for this.

However, caution is advised: A recent decision by the Federal Court of Justice (ruling from April 2023) has made it clear that a reservation fee that an estate agent charges prospective buyers and does not refund if the purchase does not go through is invalid. This means that estate agents may not charge fees that are not dependent on success and that contradict the nature of the estate agent’s commission. So if you are charged a reservation fee, you are legally entitled to a refund if the purchase does not go through.

Generally speaking, a reservation agreement is not binding as long as there is no notarized purchase contract. However, it can be helpful in the short term in order to gain time for the financing confirmation or final checks. However, you should not rely on it too much. If you agree a reservation, make sure to put it in writing and clearly state how long the property is reserved for and what happens to any fee paid. Please note that in many cases, instead of a reservation, the draft purchase contract is simply prepared quickly and an early notary appointment is sought – this creates the most security for both sides.

Finding the right notary

In Germany, every real estate purchase contract must be notarized in order to be legally valid. The choice of notary is therefore a mandatory part of the purchase process. The law does not stipulate who appoints the notary, but in practice the buyer often suggests a notary (especially as the buyer usually pays the notary fees). Take the choice of notary just as seriously as the property search.

A notary has the task of drawing up the purchase contract, providing neutral advice to all parties and finally notarizing it. Although the notary must not give biased advice – e.g. he will not assess the purchase price or profitability – he must point out legal risks and ensure a fair, legally compliant contract. The notary’s services include: drafting the purchase agreement, advising on legal aspects, notarization in the presence of the buyer and seller, and processing (e.g. submitting registration applications to the land registry, sending notifications of due dates).

The notary fee is set by law and amounts to around 1.5 % to 2 % of the purchase price (including land registry costs) – it is not worth comparing prices here, as all notaries charge according to the same fee table. You can use a few criteria as a guide when looking for a notary: Reputation and experience (any recommendations from acquaintances or your estate agent?), capacity for a prompt appointment (the notary appointment should take place as soon as possible once you have reached an agreement with the seller), as well as the impression of seriousness and neutrality.

Your estate agent will often be happy to help you find a notary – experienced agents such as ADEN Immobilien work with trustworthy notary’s offices and can put you in touch with a suitable notary. However, if the seller has already appointed a notary (which is common for new-build projects, for example), a certain amount of skepticism won’t hurt: take your time to review the draft contract and ask the notary any unanswered questions to make sure that your interests have been sufficiently taken into account. If you have any doubts about the notary’s neutrality, do not hesitate to have your own lawyer review the contract before you sign it.

Notary appointment and conclusion of purchase contract

As soon as the notary has been appointed, he will prepare a draft purchase agreement. As a rule, the buyer and seller will receive the draft at least two weeks before the notarization date in order to have sufficient time to check it. Use this time to go through all the points. Clarify all important questions with the seller before the appointment: Have you agreed on the purchase price? Have all agreements been made regarding the inventory being sold, payment date, handover date, known defects, etc.? Unresolved issues should not be postponed until the notary appointment, as amending the purchase contract at short notice is time-consuming. Both parties should bring valid identification documents to the notary appointment itself.

The notary reads out the contract text in full and explains individual clauses on request – don’t be afraid to ask immediately if anything is unclear. Only when everything has been understood and agreed will the buyer and seller sign the contract in front of the notary. Once signed, the purchase is legally effective, but there are still a number of administrative tasks to be completed: The notary will ensure that the necessary entries are made in the land register (such as a priority notice of conveyance immediately after the contract is signed to protect you as the buyer), he will report the purchase to the tax office (because of the real estate transfer tax) and ensure that any pre-emptive rights are checked.

As the buyer, you will receive mail from the tax office in the weeks following the appointment with the land transfer tax assessment – you must pay this tax promptly, otherwise the notary will not be able to arrange the transfer of ownership. The purchase price will also only be paid after the notary appointment: A due date is set in the contract, usually a few weeks later, when all requirements (e.g. land register entry of the priority notice, deletion of old land charges of the seller, etc.) have been met.

Your notary will monitor these conditions and give the green light as soon as you are allowed to pay. After payment and receipt of the tax clearance certificate, the notary will arrange for the property to be transferred to you in the land register, making you the official owner. Finally, on the agreed handover date, you will receive the keys and a handover report will be drawn up.

Careful preparation and the support of experts will turn the complex purchase transaction into a predictable process. A good estate agent will also be at your side: they will coordinate the parties involved, remind you of deadlines and ensure that nothing is forgotten from the survey to the signing of the contract.

ADEN Immobilien accompanies buyers from the first viewing to the final handover of the keys and is available to answer questions at any time. Are you still unsure about the process or need advice on the next steps? Contact us – we will be happy to assist you with the purchase of your property and ensure that you can relax and prepare to move in.