Advices for those who plan to buy and rent property in Germany
You’ve visited Germany many times, fell in love with this country and decided to spend some indefinite time here. Or you’re a student, who’s looking for a cheap real estate in Germany. Or maybe you’re looking for a roommate to share your rent? In any case, our digest of advices is targeted to help new buyers in Germany with dealing all the challenges. Step by step, you will know, how to find the best home in Germany, how to check the tenancy contract and how to cut your bill’s payment.
- Finding a house and a region to stay is the first step. It’s good when you have the opportunity to regard different places, then you can find cheaper options. It’s getting more complicated when you entered a university in the city which turned out to be extremely expensive for living – in this case you must think how to survive. So, keep in mind, that Bavaria is the most expensive region in Germany in terms of buying and renting property. Even Berlin is cheaper. So before deciding which university to enter and what position to hold, think beforehand if you will be able to pay more.
- Types of residencies in Germany are the following:
- Freestanding house – Einfamilienhaus
- Townhouse – Reihenendhaus
- Semi-detached home – Doppelhaushälfte
There are cellars in almost all of the property in Germany. So you will got free space you can use the way you wish. You can use it also as a storage.
- Think about how long you plan to stay in Germany before deciding if you want to buy real estate or rent it
Usually Germans prefer to rent home. One of the reason for it is that this process is controlled by housing associations, banks and local government. Renting in Germany is getting more and more popular, especially if you are a student. But if you consider staying in Germany for undefined period of time, and most likely that you plan your future there, it’s better to think about buying real estate in Germany.
- Do not rely on your own strength only
Some people when they decide to buy a house, think that they can do everything themselves. One of the main explanations is that it’s cheaper, because you do not have to pay for the services of real estate agent. But then, when it comes to counting the total costs, the result can scary firstbuyers. Just because it seems cheaper to arrange everything yourself doesn’t mean it really is. You can spend several times more than you have to just because you do not know all the details of the buying process. So isn’t it easier to find a person you can rely on while buying home in Germany? Moreover, a person who is experienced and who is qualified.
- Expect to have all the necessary documents for renting a house
If you think that for renting home in Germany you do not need so many documents as for buying home, you may be wrong, because it’s not true. Be ready to submit your CV, application form, residence permit, credit report, proof of your income and the certificate from your former landlord which shows that you do not have owing rent.
- Remember about legal issues
There are no restrictions for people from Europe to stay in Germany, but if you want to stay for more than 3 months, you need to get residence permit. It’s not difficult at all, but should be done if you want to buy home in Germany.
- Notary is independent person
That’s what make the difference in buying process. He will not act neither on your side, nor on the side of the seller. What he will do is checking the title deeds, overseeing the sale contract between you and the seller and also listing the transfer of ownership with the land registry. You have the opportunity to choose your own notary, the best choice is English-speaking one.
- The commission for the services of real estate agent
Those buyers who want to facilitate the buying process use the service of real estate agent in Germany. The buyers are expected to pay 3-7% of the total purchase price. Depending on the agreement this money can be paid by buyer, or by buyer and seller. But the costs of the process can be at around 10% of the whole amount. For obtaining a mortgage the buyer has to pay deposit of about 30% of the purchase price.
- Agree the percentage at the start
Even though the property market in Germany is well regulated, pay attention to the commissions. They are not regulated by the law. That’s why agreeing the percentage and who will pay is one of the first steps on the very beginning.
- Capital gains tax exists!
In Germany there is a capital gains tax which means that you will have to pay 25% when you are re-selling your property in Germany. It does not apply to the property which was owned for over 10 years.
- The law protects you
Because of the law, which is mostly on the side of the tenant, you cannot be evicted by the owner, before the lease has been terminated.
- Beware of paying to multiple agents!
Be very careful with a restrictive exclusivity agreement, because when you opt it you can pay commissions to multiple agents.
- What is von privat?
If you see the title “von privat” in the advertisement about property or on the website with houses in Germany, it means that the service of real estate agent is not involved.
- Is inexpensive home really inexpensive?
Many newcomers start looking through advertisement about real estate in search of something really cheap. But sometimes all these inexpensive homes is a trap. Sometimes sellers, which put their property in position of cheap, do not say that there are many renovation requirements which are requested to make the home livable. So keep in mind that sometimes more expensive house in Germany can cost less than all the “hot offers”.
- Are large rooms the privilege?
While searching for real estate in Germany you can meet the word “grosszügige Räume“. It means “large rooms”. But is it the privilege? As the experience, no. Because, in the other words, it means “very expensive to heat”.
- How to spot non-desirable real estate?
There are people who make quick decisions about home to buy. There is a special section for them which is called “für Schnellentschlossene“. Is it better for you when you are in pursuit of the house in Germany? And which homes does this sector consist of? Usually it’s the set of homes which are not very desirable, and probably before that they were on sale, but there were no people willing to buy it.
- What to use: newspapers or websites?
It’s very time-consuming process to hunt a house. And there are a lot offers in newspapers, magazines and on the websites. When you are looking for a property in Germany in newspaper you can hardly find the address of the owner, that’s why you will have to make an appointment with agent or go-between. When you are searching for an apartment in Germany on the website with real estate, probably you will have links to the full addresses and maps, which will show you in which district your potential home is situated and also the main directions.
- Ask the seller if he signed the contract with the agent
This action is advisable and has reasons for it. It’s logical to ask the commission from the seller, since he’s judging the work of the real estate agent. In most cases the buyers will see the agent for one or two times, so there is nothing bad to ask what exactly has the agent done to get his commission paid.
- If you are offered one house by 2 agents
There are situations when a potential buyer gets 2 offers: from one agent and then from the other. But these offers are for the same property. In such an interesting situations the buyer has to tell about it the second agent. It’s better to do it immediately. In the other case you may fail and pay double commission.
- Copy of purchase contract
Before going to the notary and signing the contract ask for the copy of it. Review it very carefully, translate if necessary. All your questions which you want to ask should be prepared in advanced. If something is non-understandable for you, you can interrupt the process. You are allowed to get sufficient time for getting the full answers on all of your questions.
- The contract should be read verbatim
On the day when you are signing the contract, you meet the seller and the notary. One of the notary’s duties is to read the contract aloud and verbatim. The notary should be certain that both seller and buyer understood the content of the contract. The reading is performed in German language, but you, as a buyer have the right to hire a professional interpreter who will translate the content to you. Take into consideration that it will be additional cost.
- Who should be present at the signing ceremony?
Usually the buyer is not the single person. It can be even group of people. It’s required that all of them should be on the ceremony if signing contract.
- How your German bank can help you?
Some property for sale can be offered by German banks. So it’s advantage for you when you use the service of German bank. It can help you with financing your property for some time.
- What does German Real Estate Association do?
Helping hand in the buying process can be given by German Real Estate Association. They will help you to find a house of your dream in Germany. This association also helps to find realtors, experts, public notaries, surveyors and tax advisors. If you want this association to help you, search for its German name ” Immobilien Verband Deutschland”.
- Mortgages in Germany
Hypothek is German word for mortgage. It’s offered by most German banks. The bank can offer you to finance 60% – 70% of your purchase but for these you should show some proofs as exact value insurance etc. Unfortunately, if you are a foreigner and so not earn money in Germany, German banks cannot offer you mortgages more than 60%.
- Will the deposit for the house be high?
Yes, as buyer, you’re supposed to pay a high deposit. In most cases it’s 20%, but for expats this amount can be even up t0 40%. Why should you put down a high deposit? First of all because the landlord regard the purchase process with expat more risky. If you have the savings over the last several years, prepare the proofs of it.
- How to calculate your mortgage?
Of course, to calculate your mortgage, you can go to the bank or to the mortgage advisor. But the first step is to use online mortgage calculator. You can find it in the internet and it’s free.
- Payment terms
If you are worrying about payment terms, remember, that it can be discussed and agreed. It will be stated in the purchase contract.
- Who should check the property?
The notary cannot check the property, because it’s not in his competence. Therefore it’s the duty of the buyer. He should check the conditions in which he is getting the home for buying. That’s why the property should be checked for any defects before the contract of purchase is signed. There should not be any hidden damages. All of them should be disclosed by the seller. Only the obvious defects are the exception. They can be not pointed out by the seller.
- Why to make application in the land register?
You must remember about the importance of the land register because one cannot sell or buy property without making an application to the Grundbunch (land register). For registering your property you must pay 0.8% – 1.2% of the purchase price.
- When you become the owner of the property?
In approximately 35 days everything will be done and you will become the owner of the real estate in Germany.
- Why share the house while renting?
Young people, especially students, prefer to rent their homes. And, of course, to reduce the rental rice, most of them tend to share an apartment. It’s non-formal process and you can find the roommate among your friends, classmates or on the websites, specialized on flat-sharing. The renting contract, in most cases, will be signed by one of the tenants. And remember it should be trusted person, because if you’re not the one who sign the contract, it will be your roommate. It means that you will be given the property by a person who is already tenant.
- What the landlord can ask you?
Remember, that before you move in, the landlord can be quite interested in some questions about you. So be ready to tell about showing bank statements, to tell if you ever was declared a bankrupt, if you have pets, what is your marital status and if you have children. For many people this information seems too personal to be declared to the landlord, but, as the experience, it only helps to make the relationship between you and your landlord more tight.
34.Which tenancy leases can be offered to you?
Before renting the property you must know that you can rent it for limited and unlimited period. Unbefristeter Mietvertrag is for unlimited duration, and, on the opposite, befristeter Mietvertrag – for limited duration lease.
- How to prove the condition of the apartment for renting?
Before starting your tenancy period you will sign the lease, but there is the other documents which is stating the conditions in which the property is given to you. The name of the document is Übergabeprotokoll. All the details about the property you will live in should be put down in this document. It will protect you as a tenant till the end of the lease.
- What to expect from your tenancy?
To know what you can expect from your tenancy you must know that there are different types of tenancy in Germany. Sometimes all the running costs can be included in the rental price, sometimes you should pay for some extra services. Sometimes almost all of the services are excluded.
- Reducing the price for some extra services.
As far as paying for electricity and gas can cost you a pretty penny, it’s good when you know how to reduce the costs for t. To save some money you should ask for the advices in utility companies such as Society for Rational Energy Use. Such companies usually advise people how to use alternative energy resources, solar technology and so on.
- What do additional costs mean?
The landlords regard additional costs separately from the rent payment. It can be furniture supplement, extra housing space, collective heating and such services as house cleaning, rubbish disposal and so on.
- Which agreement do you need if you plan to share accommodation?
Shared tenancy, which helps to save the money for young people, is very popular and need a special tenancy agreement to be signed. Among these agreements there are the following: when all the tenants are equal and are regarded as subtenants; when there is a special agreement for each room, when there is a person who is the main tenant.
- Are you protected as a tenant?
Yes, While renting in Germany a tenant is considered to be highly protected. Rental market is highly valuated. So you will have a wide range of protection. But this also makes landlords very watchful while choosing tenants. That fact, that tenant’s rights are highly protected sometimes operate against landlord: it’s more difficult for him to get rid of troublemaking tenants.
41.How Mietspiegel can help you?
If you plan to rent home in Germany, you can use some services which can help you with this process. One of them is Mietspiegel. This is a special service, which is situated in each section of the town and makes comparisons of the prices on renting in different districts. If you doubt if the price of renting, suggested by the landlord is legal, toy can also contact Mietspiegel. They will tell you if it’s not illegal to charge such a high price. You can also ask if some property in the district you’re interested in is available.
- When the demand in accommodation is the highest?
The price on the property you want to rent in Germany can vary depending on the time and season. It varies particularly in the cities with large student population. The closer to the beginning of the term, the higher price on renting.
- What to know before moving in?
Take care of many things before moving in. This will help you to avoid troubles and misunderstandings in the future. Water, electricity and gas, oil and coal heating should be checked before you sign the tenancy contract. That means that you should know who is responsible for supplying water/gas/electricity and where to register. Even though it’s the easiest to register at your local supplier, you can always choose from a wide range of alternate providers. Major prices varies depending on the company which is supplier.
- Are you supposed to separate garbage?
Even though in most cases it’s your deal if you have to separated the garbage or not, but it always shows your high level of environmental consciousness. And also it’s common in Germany to separate the rubbish. It makes it easier for next recycling. And usually there are several types of bins in each apartment or apartment block. Be ready to collect packaging, glass and paper separately. There is also a bin for the other rubbish, which is called Restmüll and does not fall into any category.
- How to get cheap student accommodation?
Both national and international students can find cheap accommodation for renting with the help of Association of German Student Services Organization. In German it’s called Deutsches Studentenwerk. Mainly there are shared student apartments, but sometimes full apartments can be offered (for families, for examples). The main determinants of the price are the year of building and the living conditions in the apartment. But, unfortunately, there is limited amount of subsidized student rentals.
- Other choices for the students
If you are a student and want to rent in Germany, but failed to get shared accommodation, there is no reason to give up. There are alternative choices such as university guest houses or student unions and notice boards. The last ones are called Schwarze Bretter in Germany. They are situated in universities or in the other research institutions. They are usually accessible for all students and employees. But in most cases only single rooms in shared accommodation are available. University guesthouses, on the other hand, in most cases are reserved, and you should put your name on the waiting list. And the application should be made as soon as possible, because there are always many applicants to receive housing.
- What should the tenancy contract contain?
Germans call rent contract Mietvertrdag. It’s signed when the apartment is rented. There should be the following details in the normal tenancy contract: rent amount, length of the agreement, term of notice, deposit, conditions under which the rent can be increased, additional costs, inventory when the apartment is furnished. There can be also the general house rules.
- Why to join Tenants Association?
The word “Mieterschutz-Verein” should be familiar to you, because it’s German name for the Tenants Association. This local association can help you to get professional support or advice, when you need it immediately. This association represents your rights when the conflict between you and landlord arises. After a few weeks of membership in this association you will have to pay some legal fee.
- Redecorate or not redecorate?
In your tenancy contract should be an information about redecoration of the property in Germany, and who should do it. It should be also specified, when the redecoration should be done. When a landlord does not want to redecorate a house before a tenants moves in, there can be two scenario: you redecorate the house when you move in or you do it when you move out. of course, there is a possibility that you won’t be allowed to redecorate at all, but it’s quite rare.
- and the last one. House keys.
Before starting your renting period make sure you got all the keys, which are listed in the tenancy agreement. Be careful with the keys, because in case you lose some of them you will be responsible for buying new ones or making another locker. Be careful with making the copy of the key. Usually all of them are numbered and to make the copy you need to get permission of your landlord.