Berlin Property - The Buying Process

Making an investment into Berlin property can seem confusing, especially with an unfamiliar buying process and having to contend with a foreign language describing an unfamiliar legal process.

In reality the buying process for Berlin property is both simple and comprehensive, protecting the investor and ensuring fit and proper transactions.

The German process of buying Berlin property offers great protection to the investor and helps to safeguard the investment being made.

The role of the property Consultant/Estate Agent

As in most countries an estate agent receives an instruction from the seller regarding the sale of their property. However, in Germany the purchaser is charged a commission for the purchase which can range from 4 - 6%.

The Notary’s role

The notary acts as the middle man in the purchase and sale of a property – importantly he is legally obliged to ensure impartiality (protecting the investor).

Making an offer

The expression ‘my word is my honour’ comes to mind. Offers are made verbally through the property consultant or estate agent but are not legally binding. Negotiations can go back and forth as with most purchase and sales until a price is agreed.

The buying contract

Importantly this is prepared by the notary (whom plays the most important role during the sale and purchase). The notary can be appointed by the buyer but it is not widely practiced and is usually recommended by the seller or their representative.

The buying contract lays out the obligations of the buyer and seller, the terms of the purchase and penalties for any defaults.

It should be noted that the buying contract will be in German so it is essential that the Notary speaks English or indeed an interpreter is present. The buying contract is read out (the reading) by the notary to ensure full understanding by the investor. It is perfectly acceptable for the buyer to interrupt and ask questions through the reading of the buying contract and a copy of the buying contract is made available beforehand.

The buying contract will contain details such as:

• A detailed description of the consequences of either the buyer or the seller not fulfilling the agreed terms and conditions.
• Agreed purchase price and terms and conditions of the sale.
• Handing over date
• Costs of notary contract
• Transfer of property ( How, when ) ⇒ mostly as soon as purchase price or part of it has been paid to notary’s trust account
• Names and addresses of both parties and the property.

Restrictions on the property use

As part of the function carried out by the notary they will conduct a land register search ensuring the property can be sold and if sold there are no prevailing conditions on the property use, i.e. right of the neighbor to use path on the property.

Payment for the property

The payment method is entirely up to the buyer, the most common and safest method is by depositing the funds into the notarised account (Notaranderkonto). Upon receipt of the purchase price the notary registers the transfer with the land registry.

Existing tenancy Agreements

The vast majority of investors purchase property which is already rented out. It is therefore essential that existing rental agreements are seen and understood by the investor as all duties and responsibilities which come with the rental contract are transferred to the new owner of the property.

Change of ownership  completing the purchase

The change of ownership can only happen when the notary makes an entry at the land registry. This can occur when all previous mortgage or finance issues have been addressed and it is confirmed that no previous taxes are outstanding on the property.

Once all these issues have been confirmed to the notary and buyers satisfaction, payment then is made from the notarised account to the seller and transfer takes place.

Useful links

• If you are looking to purchase Berlin property as an investment enter here to view our portfolio.
• Read about our Berlin investment property services here
• Discover the top ten reasons for purchasing Berlin property

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