Real estate purchase


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June 2020

Individual freehold ownership, condominium declaration, common ownership, maintenance reserve, HOA manager, individual freehold property manager, etc. – during a condominium acquisition you will sooner or later come across some or all of these terms.

Our job is to shed some light on this arcane terminology. We will help you make the acquisition of your condominium a piece of cake. Let us initiate the joint process right here, as we brief you in this guideline on the standard steps involved in condominium acquisitions – from your initial wish to buy, all the way to the eventual transfer of title.

What Are Your Expectations when Acquiring a Condominium as Private Investment?Where would you like to live and how? What are your expectations when acquiring a condo as private investment?

This is where you make your first choice in your search for the perfect property. Are you looking for a condominium for owner occupation or as an alternative type of savings account? Which criteria matter to you? Do you prefer a trendy quarter or green living? Would you rather fancy a 4-bedroom apartment in the suburbs or two smaller apartments downtown for the sake of risk diversification? Quite a number of criteria enter into the condominium acquisition process, and all of them need to be taken into account. Buying a condominium can mean a retreat for your family or your personal sphere where the major part of your life unfolds. Alternatively, it may be a private investment intended to provide extra security in your retirement.

The succession of necessary steps is precisely defined. The sections below will tell you what these steps imply specifically. At the same time, you may approach us personally with any query you might have – after all, we are here to help you get the condo of your dreams. Write us an e-mail or give us a call!

Any condominium acquisition starts with the selection of a suitable condominium. But what does “suitable” or “unsuitable” mean? Much depends on whether you are buying a condo as a private investment or as your own residence. 

Assuming you are buying a condominium to live there yourself, many emotional aspects are sure to come into play. How do you actually like the building you are reviewing, the location of the flat, its ambience, and its neighborhood? What about the amenities in the vicinity, and where are the closest shopping venues? If you have children, where is the closest school or preschool? How long will it take you to commute to work, and how good is your transportation access? You will want to weigh all of these aspects carefully when contemplating the purchase of a condominium. On top of that, however, it recommends itself to find out all you can about the housing estate management (management contract), the home owner association (minutes of the meetings of owners), the amount of the maintenance reserve set aside so far, and the budget. Any reputable seller will readily grant you access to the relevant documents.

The hard facts also play a key role when buying a condominium as capital investment. With this type of condominium acquisition, sentimental reasons tend to take a backseat whereas criteria such as relettability, financial feasibility, yield, and the state of the building as well as the nature of the home owner association rise in significance. At this point, we will naturally help you pool all relevant information in order to obtain an accurate picture of your potential private investment. Having picked a suitable flat together with you, we will support you in your decision-making process by scheduling a viewing and sending you the relevant documents. We will gladly sit down with you to go over the important paperwork and to highlight the differences along with advantages and disadvantages of a given condominium for you.

So you have found your dream condo? If so, the time has come to put your money where your month is. State your intention to buy via a reservation agreement, which will secure the condominium you selected for a certain period of time. 

Once the reservation is in place, you will receive all relevant documents to review, and we shall list them for you when the time comes. At this point, it will no longer make a difference whether you buy the apartment for owner-occupation or as private investment.

  • Budget Condominium fee settlement

  • Minutes of the meetings of owners

  • Energy performance certificate

  • Lease contract documents plus current rent rate (if the condo is bought for investment purposes)

  • Management contract

  • Proof of insurance

  • Standard contract of sale

  • Condominium declaration

As you prefer, we can either go over the documents together, or you discuss them with family and friends, or else you may even consult an attorney specialising in real estate law. It is best not to underestimate the effort involved in screening the documents and interpreting their contents. Whenever you acquire a condominium, the property acquisition may take centre stage, yet simultaneously it involves your admission into a home owner association (HOA), which has already made decisions you will simply have to accept as is. So be sure to set plenty of time aside for studying the paperwork.

Assuming you are still willing to buy the property after scrutinising the documents, you move on to the next, decisive step, concerning the issue of financing your acquisition.

When it comes to financing your condo, you should answer the following questions for yourself: Are you going to use your savings to buy the flat? Which bank would be your best bet for jointly realising your dream of homeownership?

What sort of collateral does the bank require? What sort of collateral do you have?

This aspect will raise another bunch of questions that you will have to sort out with a bank you trust before arranging an appointment with a notary. Once you have agreed on the covenants with your banks, your equity statement in combination with your bank's commitment to finance will serve as proof of financial ability vis-à-vis the seller.

As soon as the issues of counselling interview, viewing, review of documentation, and financing have been taken care of, you may schedule a registration appointment. Due to the very extensive consumer rights regulations in Germany you will get the draft for the deed at least 14 days prior to the appointment with a notary. Here as elsewhere, there will be plenty of time for a thorough review and clarification of all questions.

For many people, a condominium acquisition is the first time they are in touch with a notary. Yet even first-time buyers need not worry – because just like the condominium acquisition as a whole, the process flow of the 

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registration appointment, too, is clearly regulated every step of the way. The notary serves as neutral intermediary and legal facilitator of the transfer of apartment and money, from seller to buyer and vice versa. His responsibilities also include calling in the purchase price, though not until the transfer of the property to the buyer can be fully guaranteed. Following introductions, the notary will read out the deed aloud. During the reading, the buyer may naturally ask the notary questions regarding the contents of the deed. The notary is legally required to take a neutral position. Once the contract has been read and all question have been answered, buyer, seller and notary sign the deed.

Following the notarisation, the notary files for the entry of a priority notice of conveyance in the land register to protect the buyer. As a result, the buyer will be “pre-registered” as incoming owner. This keeps the condominium from 

being sold more than once. The notary cannot call in the purchase price until the priority notice of conveyance has been registered. After the written announcement by the notary that the conditions for calling in the payment of the amount of purchase have been met, it is your or your bank's turn to transfer the amount of purchase before the deadline (no less than 14 days) into the seller's account. Once the seller has received the payment, the transfer of rights, benefits and obligations will take place on the first day of the month following. As of that day, you will be owner of the condominium including all rights and duties associated with it. You may now use the apartment as intended, either moving in yourself, or collecting rent from a tenant. Then again, you will also start paying condominium fees.

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