Selling

Selling our flat in Germany has been a painless process. Maybe we are meant to leave? We signed up to an agent, who we paid 2,38% of the total price of the flat in fees. She then took care of the whole process – advertising, showing people around, and also joined us at the “Notar” (notary) to sign the contract. Note that you have to pay the agent's fees immediately after sale - so, in our case, even 3 months before you receive the money from your buyer - be sure to have the cash! 

We made an extremely quick sale – the first couple that viewed the property declared their intention to buy within a week of it being on the market at the full asking price. This surprised both of us.  Before signing up to this agent we were actually told by another agent that there was no way we would get our asking price; our property was after all “second hand” and he told us to sell it for a considerable amount less. Also, given our smoking neighbours  on one side and our party animal loud-music-playing student neighbours on the other, there was always a concern that one or the other or, perish the thought, both, would be happening at exactly the same moment potential buyers arrived to view the flat. (Oh, and incidentally, the smoking scenario did. Needless to say that couple did not buy the flat.)

Historically, the Germans are a nation of renters. They prefer to rent accommodation rather than buy. Once they decide to buy, unless of course they have unlimited financial means, they usually stay in the property for a long time and there isn’t the same buy-sell-upgrade mentality like in the UK. More often than not, Germans will save and around their late 40s, early 50s decide to buy a plot of land and build a family home. The difference in attitude reflects the difference in housing markets – in  Germany over the last 10 years have risen a mere 2-3%. In fact, since the 1990s housing prices have actually fallen. Buying a flat is also not that easy to finance. Most banks require a deposit of around 20% and proof of earnings over several years before they will even consider giving you a mortgage. You are also highly taxed for buying a flat. The “Grunderwerbsteuer” (property transfer tax) is roughly 3,5% and you pay annual tax on your property.

These times are now changing and due to low interest rates, higher rental prices, and particularly in Baden Württemberg, more demand than supply on rental accommodation, more Germans are opting to buy at a younger age. The good news is that we were very lucky and able to take advantage of this bubble. In our case, the buyer is 25 years old and his father is paying for the flat outright. The bad news is, this means moving out by December and finding rental accommodation.  At least it gives me something to write about!

To buy or not to buy?

You are fed up of renting. You are fed up of landlords. What’s the obvious solution? Buy! Be your own landlord! Surely this will be better than being responsible to someone else and living in someone else’s property according to their rules. You decide to invest your savings (what’s the point in having money in banks these days anyway) and buy a flat in Germany. You go for a new build, which is under five years guarantee. You choose the perfect location in the centre of town, close to absolutely everything you could possibly want – the station, shops, swimming pools, schools, nurseries, play parks, etc. You decide that you want to live in it yourselves for a few years and even if after that you want to move, it will be a good investment, because 4 room flats in Heidelberg are hard to come by and very easy to rent out.

How do you go about it?

You will not find “For Sale” signs anywhere in Germany, so finding a flat to buy is generally done through an “Immobilienmakler” (estate agent). Calculate additional costs of around 10% of the “Kaufpreis” (purchase price). These costs include your agent’s commission, tax, and notary costs. Once you find something, you generally sign a “Kaufzusage” (a declaration of commitment to buy).

You then have to find a bank to give you a mortgage. My husband is responsible for all things financial in our house, so it was his task as a Spanish native to find a solution. As mentioned, it is not that easy to get a mortgage in Germany without a significant amount of “Eigenkapital” (own capital). You have to prove your value as a mortgage-taker; provide income statements for the last 3 years, show that you have an unlimited permanent employment contract, declare any assets, such as savings, pensions, as well as any debts, however small, that you have. Even the new TV I bought last week on credit? Yes, even that. By the end of the inquest, you feel like you have been strip-searched.  

I remember going to three different credit institutions; a Dutch Orange Bank and two local banks. When we signed, interest rates in Germany were at 5% - nowadays they are as low as 2.5%. Now, listen very carefully I shall say ‘zis only once – make sure you read all the small print! There was a tiny section in the Dutch Orange contract stating that they were entitled to resell our mortgage to a 3^rd party (do banks ever learn?!) And even the mortgage we signed in the end has a tiny section at the end of the contract with details about the “Vorfälligkeitsentschädigung” – the so-called prepayment penalty – designed to compensate your bank for any losses if you exit your mortgage agreement earlier than arranged. It’s such a seemingly small and insignificant section of the document as a whole that you only really realise its true significance when you inform the bank of your intention of selling. They subsequently inform you that that will be a fine of 30,000 Euros thank you very much. No exaggeration.

Anyway, once buyer and seller have agreed a price, the next step is to sign a property sales contract, ”Kaufvertrag”  in the presence of a notary;  the “Notar”. His fees are usually total around 2% of the purchase price. He reads the whole contract of sales verbatim in German. You are made to swear at the beginning that you can understand the whole document and that you therefore forego an interpreter. You are sort of lying through your teeth; at the very least your husband is. In our case, it took the Notar 2 hours to read the whole thing, so imagine how many pages it contained. By the end, you are totally exhausted and drained. You keep telling yourself it must, must be worth it. You have a brief moment of trepidation – I am actually buying a flat in Germany - do I really want to live in Germany? You then sign and the notary enters you into the land register. Done deal.  You are officially a “Wohnungseigentümer” (homeowner). You go home and celebrate with a large bottle of red wine and a strong whiskey.

Sounds easy, right? Well, we are (just about) living evidence that it can be done by non-natives. Now, with the benefit of hindsight, I think we were insane!