In Germany the most popular housing option is to rent. About 40% of Germans own their own homes in comparison to the 60% of Americans that own their own homes in the states. Although renting is more popular in Germany, buying your own home as a foreigner is possible. If this is what you want to do, it’s best to start researching and preparing well in advance to when you’d like your relocation to the overseas nation begin.
Searching for and Choosing a Property
Searching for the right property might be the hardest part. The homes in Germany obviously differ from the homes you’d find for sale in the U.S. Many of the properties you’ll find for sale are apartments, so you’ll need to decide what it is you desire in a home. Before you begin searching, create a list of everything you desire including specific amenities, the amount of rooms you need, number of bathrooms, split level or ranch style, etc. You may not find every feature you desire in a home but a list will help you focus on the things you’re looking for.
It’s also wise to hire a real estate agent for help, especially if you’re searching for your new home as you’re still in the states. A real estate agent out of Germany will know the area better and have a great deal of knowledge pertaining to foreigners looking to buy homes on the nation. They’ll make the entire experience much easier on you and your family. Many German homes for sale aren’t found listed online or in newspapers (although you should always check these types of media). A real estate agent will be able to notify you of homes for sale that you may not have any knowledge about.
It will take a significant amount of time to legally buy a property in Germany as an expat so make sure you have the time to dedicate towards the following steps of property buying in the nation…
- Investigate mortgages and get an offer in principle
- Find the right property
- Make an offer
- The notary (notar) will draw up the sale contract
- Finalize the mortgage
- Sign the contract
- Notary registers the sale
- Pay property tax 4 weeks after sale is registered
In Germany, a minimum deposit of 20% of the home’s value will be due upon the finalization of the sale. Make sure you have this amount of money saved and that you’re aware of the difference in currency value. For instance, 1 euro is equal to 1.16 American dollars. Some lenders may even ask that you put 40% down on the deposit of your home so ask your real estate agent what is required of you. In Germany, as the home buyer you will be expected to pay most of the costs associated with buying and owning a property including:
- Property transfer tax of 3.5% –6.5%
- Notary's fees 1.2% –1.5%
- Registration fees 0.8% –1.2%
- Estate agent's fees, if shared, of 1.5% –3%, plus VAT at 19%
Before signing a contract for buying a home in Germany, make sure you fully understand all the stipulations as well as your responsibilities as a homeowner in the nation. Most contracts are written up in the German language so if you can’t interpret what the contract says, have someone there to read it to you. The signing of your contract will be in the presence of the notary. Whether you start the home buying process before or after your relocation to Germany, make sure you have everything in order.