What are the steps to be followed while buying a house (Altbau in this case)?
(I have written this procedure as per our experience)
After shortlisting a house, contact the seller or the real estate agent (Immobilienmakler) and express interest to buy the house, and get information about the ballpark price of the house. Keep in mind all the additional fees that are required to close the deal (Makler fees, taxes, Notary charges,…).
Start the process of checking if you qualify for a mortgage. Approach banks or 3rd party agents like Dr.Klein to check if you are eligible to get a loan for the sale price. These 3rd party agents (known as Baufinanzberater) can provide you loan offers from a couple of different banks and you can choose the offer that best suits you. You don’t need to pay any commission to these agents, they get paid from the bank from which you take the loan.
Once it is confirmed that you are eligible to get a loan, approach the seller to close the deal and negotiate the sale price.
Submit necessary documents to the bank for loan approval.
Get an appointment with the Notary through the real estate agent. It could take approximately 6-8 weeks to get an appointment.
The real estate agent sends you a rough draft of the Sale deed prepared by the Notary which will be in german. You can take translator services to understand the contract. If any changes need to be made, convey them to the real estate agent. He will ask the Notary to get the changes made and send you the edited Sale deed. Once you find the terms of the Sale deed acceptable, convey it to the real estate agent.
Appointment with the Notary (am Notartermin). On the day of signing the Sale deed, the Notary will read the entire Sale deed aloud in front of you, the house owner and the real estate agent. Both the parties have to sign the sale deed in front of the Notary.
After the above step the Notary initiates the process to get all the house related documents checked, for example: if the house owner has any other previous unpaid loans taken for the property, if there are or could be any future claims on the property by some other person(s) etc. This could take between 4-8 weeks. At this point you will also get a letter from Finanzamt directing you to pay the Real estate transfer tax (Grunderwerbsteuer).
When the Notary confirms that the sale can take place, he will convey the same in writing to the buyer along with the due date for making the payment (Usually 14 days).
Once the payment has been made to the house owner, he has to convey the receipt of the amount to the Notary. Please note: in case you are making a down payment for the house, the bank will release the loan amount to the seller, only once you have made your equity payment directly to the owner and the owner confirms the receipt of the amount in his account.
The Notary will then apply for the House ownership change* in Land Register (Grundbuch).
The house owner will hand over the house keys to the buyer.
*When you get the keys from the house owner, there will only be a temporary change of ownership in the Grundbuch. The proper ownership status will be reflected in the Grundbuch only after 4-8 weeks. The Notary will take care of this process and once the final entry in the Grundbuch has been made, he will notify you and also send you a copy of the Grundbuch entry.
Notes and Tips:
Notary charges vary between the federal states but it lies anywhere between 1.5-2%.
Similarly Grunderwerbsteuer is different in different states and it could be between 3.5-6.5%.
The real estate agent fees for the Immobilienmaklergebühren or Maklerprovision was earlier paid by the buyer but recently there has been a change and now it is covered equally by the buyer and the seller. This also varies between 3-7%.
On the day of the Notary appointment when you have gone to sign the Sale deed, if any other changes need to be made, let the Notary know and if the seller agrees to that change, the Notary will include the changes there itself and finally in case you change your mind for any particular reason and don’t want to sign the deed, you may do it. You may also take an interpreter with you to the appointment. You need to intimate the Notary office about this in advance.
You may want to get the house inspected by a Bausachverständiger (experts in valuing real estates) or by an architect (Gutachter), especially if the house is very old or just to make sure that the price quoted is appropriate and to know if there are hidden damages in the house.
If you are planning to get your down payment amount from your indian bank account, make sure to have it transferred to your german account by the time you sign the Sale deed, so that you have it at your disposal when the Notary releases the order to pay.