'Get help and don't rush': Your top tips for buying property in Germany
Getting on the housing ladder in Germany is tough at the moment - but not impossible. We spoke to readers who have done it to find out how they made their property purchase a success.
Germany may be known as a country of renters, but there are many good reasons to own your own home. Whether it's for more stability, a space you can make your own or even an investment for the future, getting on the housing ladder can be a big stepping stone in building a life in Germany.
That said, prospective buyers are facing a lot of difficulties right now.
When The Local surveyed its readers on the problems they faced in their own purchase, affordability, bureaucracy and the challenge of finding a good property stood out as the biggest three issues.
Rebecca Watson, who lives in Freiburg, said she had struggled to find a place that fit all her requirements in a very limited market.
"We looked for five years, and in that time, only had viewings at maybe a dozen properties," she explained, adding that the lack of properties on the market "compounded the problem".
Michael Crusoe, 40, had a similar experience in his property search in Berlin: "Intense competition requires high confidence that one can quickly assess a property," he explained.
Michael told us that the mass of paperwork, high property taxes and discrimination against foreigners had also made the process difficult. He felt that sellers were more prejudiced against people without German language skills and was shocked that his spouse's income wasn't counted for a mortgage since they didn't have permanent residency status.
READ ALSO: Germany or Austria: Where's the best place for foreigners to buy property?
These kinds of problems are part of the bigger landscape of economic difficulties that buyers have faced over the past few years. Interest rates have been soaring in the EU as part of the European Central Bank's efforts to combat high inflation - and this has made mortgages increasingly hard to afford.
Add to that the high property prices and hidden costs and things become even more extortionate - at a time when, as one reader pointed out, salaries haven't been rising at the same pace.
For 34-year-old Alex in Berlin, however, it was the impenetrable legal documents that posed the biggest problem.
"German property purchase contracts are quite long," he said. "The papers include multiple requirements applied to the owner, other nuances since the very first land development, things that happened decades ago. This results in contracts consisting of more than a hundred pages written in legal German."
A woman arranges house viewings online. Photo by Christin HUME via Unsplash
With all this in mind, it may take some courage to embark on your own home-ownership adventure in Germany - not to mention some useful advice.
Hopefully these pearls of wisdom from readers who've been through the process will help you along the way.
Patience is a virtue
Buying a property is a far cry from picking up a new pair of jeans in the January sales: if you make a hasty decision, you may well regret it for years to come.
That's why many of our readers recommended taking the time you need to get to grips with the system and learn to recognise what good value looks like.
"Be realistic about requirements and the time it will take," said Edward Thorpe in Berlin, while Matt Key in Darmstadt advised buyers to "look at as many places as possible".
"Plan for 1+ year search so you can educate yourself," Berliner Michael Crusoe advised. "Eventually you will know that a property is worth it; then make an immediate offer!"
READ ALSO: REVEALED: How the cost of renting in Germany compares to home ownership
Others pointed out that it wasn't just the property search itself that's worth spending a lot of time over: after you've found the perfect home, it's important to handle the paperwork right and also perform some due diligence.
While detailed inspections aren't necessarily the norm in Germany, Alex in Berlin said it could be worth doing anyway - and could also shave some money off the property.
"Check the property carefully, and document any issues (as during the rental process)," he said. "Some issues may be compensated later by seller or building company."
He also told buyers that checking out the surroundings of the property and looking the Grundbuch (property register) could also de worth your time.
"Check the Grundbuch for the property status and burdens, and ensure the burdens are actually removed by seller after the purchase," he explained. "Read carefully all papers, especially the ones you are going to sign."
Don't be afraid to ask for help
Of course, even if you've looked round dozens of properties and got clued up on the ins and outs of German law, there's still no harm in asking for a helping hand.
For many of our readers, talking to other people who have bought property in Germany was an essential step, as well as having reliable and trustworthy people on board along the way - and especially native German speakers.
READ ALSO: REVEALED: The German regions where property prices are falling and rising the most
Flats in Munich's historic city centre. Photo: picture alliance / Matthias Balk/dpa | Matthias Balk
That includes finding a good professional notary - as they'll generally be in charge of drawing up the contract and clarifying legal issues - as well as a translation or English-speaking real estate agent if you're not fluent in Germany.
It also involves shopping around at different banks for the best mortgage deals - and being picky about the people who give you financial advice.
"If your finance broker is not helpful or seems unwilling to explain things, look somewhere else," said Rebecca in Freiburg. "Their fees are regulated by the covenant and they're paid by the bank. If they're condescending or annoyed at your questions, drop them."
Know your numbers
A final key tip from our readers was to get a realistic idea of how much a property will really cost you - and don't get tripped up by all the hidden costs.
This might include things like commission for estate agents, fees for notaries and interpreters, and taxes that you're likely to incur once you complete the process.
"Make sure you understand all the hidden costs over and above the purchase price," advised Baden-Württemberg resident Madeleine Oliver. "Plus the weird - surely only in Germany? - system of leftover mortgage, or Restschuld, once you have finished paying off the sum with fixed interest rates."
READ ALSO: EXPLAINED: The hidden costs of buying a house in Germany
These words of advice were echoed by other readers who said buyers should prepare to borrow more than they might initially think in order to cover these additional costs.
"Get extra €30k in mortgage and hire very good Makler (estate agent) to help with papers and very good lawyer/Gutachter because Germany does not know how to build with quality anymore," said Berlin resident Damir Gainetdinov.
As reader Sekhar pointed out, the cost of interest rates and credit should be taken into account along with potential maintenance and renovation costs - which could result in a figure much higher than the one you see on the property listing.
That said, some of these costs can be spared by shopping around, getting sound financial advice, and also looking at properties outside of the city centre.
Thank you so much to everyone who completed our survey. Although we weren't able to use all the responses, we read them all and they helped inform our article.
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Germany may be known as a country of renters, but there are many good reasons to own your own home. Whether it's for more stability, a space you can make your own or even an investment for the future, getting on the housing ladder can be a big stepping stone in building a life in Germany.
That said, prospective buyers are facing a lot of difficulties right now.
When The Local surveyed its readers on the problems they faced in their own purchase, affordability, bureaucracy and the challenge of finding a good property stood out as the biggest three issues.
Rebecca Watson, who lives in Freiburg, said she had struggled to find a place that fit all her requirements in a very limited market.
"We looked for five years, and in that time, only had viewings at maybe a dozen properties," she explained, adding that the lack of properties on the market "compounded the problem".
Michael Crusoe, 40, had a similar experience in his property search in Berlin: "Intense competition requires high confidence that one can quickly assess a property," he explained.
Michael told us that the mass of paperwork, high property taxes and discrimination against foreigners had also made the process difficult. He felt that sellers were more prejudiced against people without German language skills and was shocked that his spouse's income wasn't counted for a mortgage since they didn't have permanent residency status.
READ ALSO: Germany or Austria: Where's the best place for foreigners to buy property?
These kinds of problems are part of the bigger landscape of economic difficulties that buyers have faced over the past few years. Interest rates have been soaring in the EU as part of the European Central Bank's efforts to combat high inflation - and this has made mortgages increasingly hard to afford.
Add to that the high property prices and hidden costs and things become even more extortionate - at a time when, as one reader pointed out, salaries haven't been rising at the same pace.
For 34-year-old Alex in Berlin, however, it was the impenetrable legal documents that posed the biggest problem.
"German property purchase contracts are quite long," he said. "The papers include multiple requirements applied to the owner, other nuances since the very first land development, things that happened decades ago. This results in contracts consisting of more than a hundred pages written in legal German."
With all this in mind, it may take some courage to embark on your own home-ownership adventure in Germany - not to mention some useful advice.
Hopefully these pearls of wisdom from readers who've been through the process will help you along the way.
Patience is a virtue
Buying a property is a far cry from picking up a new pair of jeans in the January sales: if you make a hasty decision, you may well regret it for years to come.
That's why many of our readers recommended taking the time you need to get to grips with the system and learn to recognise what good value looks like.
"Be realistic about requirements and the time it will take," said Edward Thorpe in Berlin, while Matt Key in Darmstadt advised buyers to "look at as many places as possible".
"Plan for 1+ year search so you can educate yourself," Berliner Michael Crusoe advised. "Eventually you will know that a property is worth it; then make an immediate offer!"
READ ALSO: REVEALED: How the cost of renting in Germany compares to home ownership
Others pointed out that it wasn't just the property search itself that's worth spending a lot of time over: after you've found the perfect home, it's important to handle the paperwork right and also perform some due diligence.
While detailed inspections aren't necessarily the norm in Germany, Alex in Berlin said it could be worth doing anyway - and could also shave some money off the property.
"Check the property carefully, and document any issues (as during the rental process)," he said. "Some issues may be compensated later by seller or building company."
He also told buyers that checking out the surroundings of the property and looking the Grundbuch (property register) could also de worth your time.
"Check the Grundbuch for the property status and burdens, and ensure the burdens are actually removed by seller after the purchase," he explained. "Read carefully all papers, especially the ones you are going to sign."
Don't be afraid to ask for help
Of course, even if you've looked round dozens of properties and got clued up on the ins and outs of German law, there's still no harm in asking for a helping hand.
For many of our readers, talking to other people who have bought property in Germany was an essential step, as well as having reliable and trustworthy people on board along the way - and especially native German speakers.
READ ALSO: REVEALED: The German regions where property prices are falling and rising the most
That includes finding a good professional notary - as they'll generally be in charge of drawing up the contract and clarifying legal issues - as well as a translation or English-speaking real estate agent if you're not fluent in Germany.
It also involves shopping around at different banks for the best mortgage deals - and being picky about the people who give you financial advice.
"If your finance broker is not helpful or seems unwilling to explain things, look somewhere else," said Rebecca in Freiburg. "Their fees are regulated by the covenant and they're paid by the bank. If they're condescending or annoyed at your questions, drop them."
Know your numbers
A final key tip from our readers was to get a realistic idea of how much a property will really cost you - and don't get tripped up by all the hidden costs.
This might include things like commission for estate agents, fees for notaries and interpreters, and taxes that you're likely to incur once you complete the process.
"Make sure you understand all the hidden costs over and above the purchase price," advised Baden-Württemberg resident Madeleine Oliver. "Plus the weird - surely only in Germany? - system of leftover mortgage, or Restschuld, once you have finished paying off the sum with fixed interest rates."
READ ALSO: EXPLAINED: The hidden costs of buying a house in Germany
These words of advice were echoed by other readers who said buyers should prepare to borrow more than they might initially think in order to cover these additional costs.
"Get extra €30k in mortgage and hire very good Makler (estate agent) to help with papers and very good lawyer/Gutachter because Germany does not know how to build with quality anymore," said Berlin resident Damir Gainetdinov.
As reader Sekhar pointed out, the cost of interest rates and credit should be taken into account along with potential maintenance and renovation costs - which could result in a figure much higher than the one you see on the property listing.
That said, some of these costs can be spared by shopping around, getting sound financial advice, and also looking at properties outside of the city centre.
Thank you so much to everyone who completed our survey. Although we weren't able to use all the responses, we read them all and they helped inform our article.
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