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Buying House in Germany [2024 English Guide for Foreigners]

Embark on buying a house in Germany with our expert guide. From navigating the real estate market to understanding legalities and financing options, our comprehensive resource is tailored for expats and foreigners looking to make a home in Germany. Our guide provides valuable information to ensure a smooth and successful home-buying experience in Germany.

buying a house in Germany

Key Takeaways

  • Foreigners can buy real estate in Germany. There is no visa requirement to buy a house in Germany.

  • Foreigners need a valid visa to get a mortgage from a German bank.

  • Price atlas from Homeday or Immobilienscout24 will give you a good idea of house prices in a particular location.

  • You can negotiate a better mortgage contract if you have offers from different banks in Germany.

  • As a buyer, you have the right to choose your Notar. Thus, you can look for an English-speaking Notar.


This is how you do it

  • Use real estate portals like immobilienscout24 to find a property within your budget.

  • Contact several German banks and brokers to determine how much of a loan you can get and on what terms.

  • Get a creditworthiness letter from a German bank to increase your chances of buying a house in Germany.

  • You can hire a property appraiser (Gutachter) to evaluate the house you are considering buying in Germany.

  • Sign the mortgage contract one week before signing the property purchase contract (Kaufvertrag).


Table of Content


Can foreigners buy a property in Germany?

Anyone can buy a property in Germany. You do not need a visa to purchase a home in Germany.

Thus, foreigners can buy any property they like if they have the money.

But you need a valid visa if you want to take a mortgage from a German bank. You can learn more about German mortgages in our guide on how to get a mortgage in Germany.

That said, let us understand the process of buying a property in Germany.


Steps to buying a house in Germany

The home-buying process consists of four parts:

  1. Checking your affordability

  2. Finding a property within that range

  3. Finishing the paperwork required to buy the property

  4. Waiting period


 

Step 1: Check your affordability

Contact banks to explore the options of financing a property in Germany

The first step is determining your options to finance a property in Germany. To do that, contact different banks to check how much credit you can get.

We suggest you contact your home bank first. Ask them how much credit you are eligible for.

It will give you an idea about the mortgage terms and conditions.

But do not rely on only one bank. Contact multiple banks in Germany to know your home financing options.

NOTE: Tell the bank advisor you are here only to make a mortgage inquiry. And it should not affect your SCHUFA score.

Getting financing offers from multiple banks hurts your Schufa score. Thus, ensure that the bank knows you are enquiring about the mortgage.


Contact mortgage advisors or German brokers to explore different mortgage offers.

Contact brokers like Interhyp or Dr. Klein in the next step. They have affiliations with hundreds of banks and can give you further insights.

Note: Never make a buy decision based on a broker's word. They are the middle man, and their word means nothing.

Brokers may say you can get a home loan, but the bank may reject it. Thus, you don't have a loan until the bank confirms.

There are also mortgage brokers that offer services in English. For example, Hypofriend and MyMortgageGermany.


The goal of contacting different banks and brokers in the home-buying process

The purpose of contacting various banks is to know your affordability.

You can also learn a lot about the steps to buy property in Germany from mortgage brokers and bank advisors. As experts, they can answer most of your questions regarding the buying process.

For example, what is the cost of buying a house or apartment in Germany, how long does it take to get a mortgage, German property market, etc.

As you are collecting information, don't focus on negotiating mortgage offers with the banks. It's something you can do later.

Currently (2022-2023), you have a 100% finance option in Germany. It means you can get a loan equal to the purchase price of the property.

You must only bring 7–12 % of the property's price (Nebenkosten in German) from your pocket.

By the end of this step, you'll know how much you can afford and how much you need to bring from your side.

Once you know your price range, it is time to start looking for a property.


 

Step 2: Find the right property in Germany

You must spend some time researching Germany's property market to find your dream house. You can learn a lot about a property only by looking at the advertisement.

The more properties you browse online, the better you'll understand the housing market in Germany. Check our guide on what to inspect in a property before buying it.


Steps from searching for a property to sending an offer to the seller

  • Start searching for your dream house on German real estate portals.

  • During market research, shortlist a few properties that look interesting.

  • Book an appointment with the sellers to visit those properties.

  • Ask the seller to send you the property documents before your visit. It'll allow you to study the documents and know more about the property before visiting.

  • If you like the property after your visit, you can make an offer to the seller.

  • If the seller accepts your offer, congratulations, you move to the next part.

Major real estate websites you can use for finding a property in Germany

  • Immobilienscout24

  • Immowelt

  • eBay kleinanzeige

  • Banks' websites (e.g., Post bank, BW bank, Sparkasse, etc.): Different banks also have websites to sell houses. They post the latest homes available for sale on their websites first. Hence, it's worth looking there also.

  • Local newspaper: Germany has an aging population. The baby boomer generation still prefers using newspapers to post advertisements.

In today's world, you can research the area and the property you want to buy online. Read this guide to learn how to evaluate a property online.

The online research technique shared in the guide will save you time, energy, and money.


Tips and Recommendations on Buying Real Estate in Germany

  • Visit at least eight to ten properties before you decide to buy one.

  • The more properties you see, the more you'll learn about your local real estate market.

  • Don't be in a hurry to buy a house. Finding the right property is a time-consuming process. Moreover, buying a property is one of the major financial decisions of your life.

  • Use the price atlas from Immobilienscout24 and Homeday to understand the property prices in a particular area.

  • Suppose you are confused and cannot evaluate a property yourself. Then, you can hire an "Appraiser (Gutachter or Sachverständiger)" to evaluate the house you want to buy. To find one, Google "Gutachter <Your city name>" or "Sachverständiger <Your city name>."

  • Get a letter from the bank stating that you are eligible for up to X amount of credit. It'll tremendously increase your odds of getting the property in a competitive real estate market. Unfortunately, many people either don't know about it or do not use it.


 

Step 3: Paperwork required to buy a house in Germany

You have found your dream home, and the seller agreed to your offer. The next step is to check the paperwork you must do to become a homeowner.


Mortgages in Germany: Get the mortgage contract from a German bank

  • Get a list of documents: Contact your bank and get a list of documents the bank requires to give you credit.

  • Submit the required documents to the bank. Once you have submitted all the required documents, the bank may take some time to check them.

  • The bank might send an appraiser to evaluate the property. The appraiser's job is to check if the house price is fair. Every bank evaluates the property differently. The property price banks come up with is usually lower than the sale price. But, in most cases, the bank's lower house valuation is not a major concern.

  • The bank will give you a final offer after evaluating the property and your profile. The bank will draft a credit contract if you agree to the offer.

  • You must negotiate the mortgage offer with the banks. You can negotiate the terms successfully if you have offers from other banks. Learn the tricks to negotiating an offer with a German bank here.

  • Finalize the bank: This step ends once you finalize the bank and sign the mortgage contract.


 

How to get the best mortgage offer in Germany?

  • Tips and tricks for financing a property in Germany.

  • Learn the German vocabulary to find the best mortgage in Germany.

  • Documents required to get finance a house in Germany


 


Find the Notar to formalize the home-buying process

Once you have a final offer from the bank, the next step is to look for a Notar near you and book an appointment.


Who is a Notar?

A notary (Notar) is a neutral entity that drafts the purchase contract (Kaufvertrag in German). It takes both the seller's and the buyer's interests into consideration.

Furthermore, Notar ensures that the seller can sell the property. It informs the buyer about the property's use restrictions, if any.

In short, Notar takes care of the whole buying process. And it protects both buyers' and sellers' interests.


Do I have the freedom to choose my Notar?

As a buyer, you have a right to choose your Notar. Thus, if you are looking for an English-speaking Notar, you have a chance to find one.

In big German cities, it's easy to find an English-speaking Notar. But you don't have to worry if you cannot find one.

You can hire a translator to translate the proceedings and the documents.


The initial draft of the purchase contract (Kaufvertrag in German)

Once you have found the Notar, it's time to book an appointment with them.

Notar will ask you to fill out a form. It is a 2-page form requesting buyers', sellers', and property information. Notar needs this information to create the initial draft of the purchase contract.

Once the draft is ready, Notar will send it to both buyer and seller at least 2 weeks before signing the contract. It gives the buyer and seller enough time to review the contract.

You can review the contract yourself or with a lawyer or a friend. There are also online services like Advocado, Recht24x7, etc., that check the purchase agreement for a small fee. 

If you want to make any changes to the draft, you can ask the Notar to do so.

Notar creates the final contract once both parties agree to its conditions.


Sign Mortgage and Purchase Contract to finalize the property purchase in Germany

By this time, both mortgage and purchase contracts are ready. The next step is to make appointments with the Notar and the bank to sign the contract.

💡 TIP: You should sign the mortgage contract before signing the purchase contract.

There are two reasons behind it:

  1. First, it ensures you have the money before signing the purchase contract.

  2. Second, you can cancel the mortgage contract if you or the seller decide to cancel the deal at the last moment.

You can cancel the mortgage contract without charges within 14 days in Germany.

💡 NOTE: 14 days include weekends and public holidays. So, do not confuse them with business days. When in doubt check with your bank consultant. 

Once you have signed the mortgage contract, it's time to sign the purchase contract. The signing of the purchase contract marks the end of this part. It's also the last big step from your end.


 

Step 4: Final steps toward homeownership in Germany

Congratulations, you have done all the hard work, and now it's time to sit back and wait.

From this point onward, you follow the instructions of the Notar. So here is what will happen next.

  • Notar will send you the invoice for their services and a copy of the signed purchase contract.

  • Notar will notify the land register office (Grundbuchamt) to add your name as a new homeowner.

  • The finance office (Finanzamt) gets notified about the property transaction.

  • Finanzamt sends the buyer a letter to pay the property transfer tax or land transfer tax (Grunderwerbsteuer). It may take a month from signing the purchase contract or longer to receive this letter.

  • The Notar ensures all the documentation is in order. If yes, Notar will inform you and the bank to pay the seller the agreed purchase price.

Once you have paid the purchase price, congratulations; you are the house owner in Germany. Not officially, but you get the keys and can move into your new house or rent it out.

You officially become the owner when your name enters the land registry. However, the land register office usually takes 2–3 months to enter the new owner's name.

I know it's a lot, but the hard part from your end is to find the right home and credit. After that, rest falls in place.

You now have an overview of the home-buying process in Germany. To dive deep into each step, check our individual guides.

 

Cost of buying a house or apartment in Germany (Nebenkosten)

Nebenkosten is the amount that covers the cost of buying a home in Germany.

The table below shows the costs that come under Nebenkosten.

Expenses involved in buying a house in Germany

How much does it cost?

Land transfer tax (Grunderwerbsteuer)

3,5 - 6,5 % (varies from province to province)

Land register cost (Grundbuchkosten)

0,5%

Notary Costs (Notarkosten)

Approx 1,5 % plus tax

Real estate broker commission (Maklergebühren)

3,5 - 7 %

Property appraiser (Gutachter/Sachverständiger)

Approx 450 €, depending on the property

Moving costs (Umzugskosten)

500-2.000 €, depends on the city and the number of things to move

Renovation Costs (Sanierungskosten)

The renovation cost depends on the condition of the property. You can also finance it by the bank.

The fee for taking the credit (Finanzierungsnebenkosten)

Depends on the bank and your contract. Usually, it is part of the mortgage interest you pay.

(Source: Dr. Klein)


Nebenkosten is the sum you need on top of the real estate's sale price. So, for example, you want to buy an apartment whose sale price is €250k. Then, you need to bring 17.5k (7% of 250k) to 30k (12% of 250k) from your pocket.

Thus, the total cost to buy the apartment is 250k € + (17.7k to 30k) €.


Nebenkosten percentage depends on two factors:

  • Land transfer tax in the province where you buy a house

  • Real estate broker's commission.

Different provinces of Germany have varying land transfer taxes. Similarly, different brokers charge different commissions.

You'll save thousands of euros if you do not buy the property via a real estate agent.

The table below summarizes the land transfer tax in different provinces of Germany.


Province

Land transfer tax

Bayern

3,5 %

Baden-Württemberg

5,0 %

​Bremen

5,0 %

Berlin

6,0 %

Brandenburg

6,5 %

Hamburg

5,5 %

Hessen

6,0 %

Mecklenburg-Vorpommern

5,0 %

Niedersachsen

5,0 %

(Source: steuern.de )


 

Tips on writing a message to property sellers or real estate agents in Germany

You finished the real estate market analysis of the area you like. You have shortlisted some houses and want an appointment to visit them.

The gap between the supply and demand of real estate in Germany is high. Because of this, the property seller gets a lot of requests from potential buyers. Thus, do the following to get your foot in the door.

  • Set notification alerts on the German property portals to get an email when someone posts a new property.

  • Be the first to send a message to the seller. If you have browsed and visited enough properties, you can judge a new property within minutes.

  • Get a creditworthiness letter from the bank stating you are eligible to get a loan of X amount.

  • Write the message in the language used in the advertisement. For example, if the ad is in German, write the message in German.

  • Always mention in your message that you have financing approval from the bank.

Here is a sample message you can write to the property seller.


Hallo Herr/Frau <Last name of the seller>, ich interessiere mich für die Wohnung. Ich habe die Finanzierung von der Bank. Können Sie mir bitte einen Termin geben, um die Wohnung zu besuchen? Viele Grüße, <Your name>  <Your contact information>


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Disclaimer

The information provided in this post is based on our own experience and in-depth research. The content of this post might be inaccurate. It should not be considered financial, tax, legal, or any kind of advice.

We are not certified brokers or consultants. Always do your own research and contact certified professionals before making any decision.

We finance our extensive work via affiliate links. Thus, some or all of the links in the post might be affiliate links.

We get money if you click on such a link or conclude a contract with the provider without costing you a cent extra. 

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