There's a fair amount of stress that comes with buying a home in Germany - which can be made a lot worse if you feel you need to back out of the purchase at the last minute.
Whether there's issues with the property you didn't see at first or some other unexpected variable comes your way, the good news is that in Germany, you can back out of a property purchase until almost the last possible moment.
This comes down to a peculiarity of buying property in Germany that many foreign residents may not be used to - the notary appointment.
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At the final stage of the purchase process, both buyer and seller must sit before a notary - hired for their neutrality - and hear that notary read out the entire purchase agreement. Buyer and seller must then declare that they understand the document and sign it. This notarial appointment can take hours - and the notary will collect a fee of somewhere between 1.2 and two percent of the purchase price.
The appointment itself can feel tedious and the fee exorbitant. But the notarial appointment is so institutionalised within the German buying process that you can back out of the purchase at basically any time before you sign the purchase contract at the appointment. The purchase is only official once you've done it.
"Up until that point, there is no certainty that the purchase will go through. This ultimately creates a lot of stress during the last weeks before the notary appointment," Nick Mulder, Founder and CEO of Hypofriend, a Berlin-based mortgage broker that specifically serves the expatriate market, told The Local.
"Oftentimes, buyers sign a reservation agreement, but these are not legally guaranteed, so they are more psychological than legally enforceable."
Buyers - especially those purchasing directly from a developer - might end up paying a non-refundable reservation fee to stake a claim to a particular piece of property. If you back out of the purchase after paying that but before the notary appointment, you may lose this deposit but still not be on the hook for the rest.
When should you think about walking away?
Mulder says while the notary appointment can bring up a lot of stress, since whether or not you can back out all comes down to the appointment - it also gives you some time to do your due diligence.
"Given the magnitude of the purchase, we often recommend buyers to hire a property surveyor or appraiser to review the ins and outs of the property, to ensure it’s exactly as advertised," he said. "Sometimes there can be discrepancies such as the size on the ad differing from the official documentation."
Mulder also recommends that you go through the property documents carefully to spot these kinds of discrepancies.
He also cautions that once you sign the purchase contract at that crucial notary appointment, the purchase is final - as these kinds of contracts don't come with a 14-day cancellation policy as many other kinds of agreements under German law do.
A version of this article was first published in 2024.
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