Discovering Germany

As a buyer, it is advisable not to sign an ‘exclusive contract’ with one agent. It is common practice to use offers from several agents. Ask the agent at the beginning from whom he will receive his commission and what percentage this is. This commission is between 5-7% of the purchase price. In a lot of areas, the buyer pays in full. However, in some cases the commission is split between buyer and vendor, and some agents take the commission from the vendor only. The agent may only issue an invoice when he has clearly arranged for the contract between buyer and vendor. It is also advisable to ask the vendor whether or not he has a contract with the agent. Should a prospective buyer receive an offer for a house which he already knows about from other contacts, it is advisable to inform the second agent immediately in order to avoid the payment of a double commission. Once the buyer and vendor have agreed upon a purchase price, an appointment is arranged at a notary’s office for the final signing of the contract. The notary is legally bound to act as an impartial mediator between buyer and vendor. He checks the land register whether the property can be sold at all or if there are certain restrictions. Once the contract is signed he registers the change of ownership with the municipal government and enters the property into the land register. The land register records the owner of the land, the mortgages on the property, and any restrictions on the property. Additional costs for the purchase of a property  Approximately 0.5% of the purchase price as notary fee  Approximately 1% of the purchase price for administrative fees (land register entry, certifications, etc.)  3.5% of the purchase price as property purchase tax Understanding the Rental Contract Rental contracts for apartments are usually in a standard, pre-printed format. Details relevant to the apartment are filled in by the landlord and or estate agent. Duration of Rental Contracts There are usually three types of rental agreements: unspecified duration, minimum specified duration, and specified duration. The details are outlined below. Unspecified Duration The contract is valid for an unlimited period of time. The contract can be cancelled by both parties with the legal cancellation requirements, which are currently three months for the tenant. The landlord has to give a legally valid reason to cancel the contract. It is strongly recommended to obtain professional advice from a lawyer and/or a tax consultant before and during the process of purchasing a property.

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Discovering Germany