Individual ownership, declaration of division, budget plan, common property, maintenance reserve fund, WEG administrator, individual ownership manager, etc.—sooner or later, you’re bound to come across one or more of these terms when buying an apartment.
We won’t leave you to figure out these technical terms on your own. We’ll help make buying your condo a breeze. We’d like to take the first step right here by providing you with our guide to the typical steps involved in buying a condo—from expressing your interest in purchasing to the transfer of ownership.
What can I expect if I buy a condominium as an investment?
Welcome to the first crossroads on your journey to finding the right property for you. Where and how do I want to live? What do I expect from buying a condominium as an investment? Am I looking for an apartment for my own use or as an alternative to a savings account? What criteria are important to me? A trendy neighborhood or a green living environment? A 4-room apartment on the outskirts of town or two smaller apartments in the city center to spread out the risk? There are many factors to consider when buying a home, and they all require careful thought. Buying a condominium can be a haven for your family—your personal space where a large part of your life unfolds. But it can also be an investment through which you hope to secure a measure of financial stability for your retirement.
The necessary steps and their order are clearly defined. We’ll explain exactly what this means in the following sections. We’re also happy to assist you personally with any specific questions you may have—we’re here for you every step of the way as you work toward buying your dream condo. Send us an email or give us a call!
The first step in buying a home is choosing the right condominium. But what’s right and what isn’t? That depends on whether you’re buying the condo as an investment or plan to live there yourself.
If you’re buying a condo to live in yourself, you’ll certainly consider many emotional factors as well. Do you like the building, the apartment’s location, its surroundings, and the neighborhood? What about access to utilities, and where are the nearest shopping options? Is there a school or preschool nearby? How far is it to work, and what are the transportation options like? These are all factors you should carefully weigh when buying a condominium. In addition, however, it’s always advisable to find out about the management of the residential complex (management contract), the homeowners’ association (minutes of homeowners’ meetings), the amount of the maintenance reserve fund already set aside, and the budget plan. Any reputable seller will grant you access to these documents.
The “hard facts” also play a fundamental role when purchasing a condominium as an investment. Emotional factors, such as personal taste, tend to take a back seat, while criteria such as the ability to re-rent the unit, financing options, return on investment, and the condition of the building and the homeowners’ association become significantly more important. At this point, we’ll of course help you gather all the relevant information to give you a clear picture of your potential investment. Once you’ve selected a few suitable condos with our help, we’ll support you in the decision-making process by arranging a viewing and sending you the relevant documents. We’d be happy to go over the important documents with you to highlight the differences as well as the pros and cons of each condominium.
Have you found your dream apartment? Then it’s time to get down to business. You declare your intention to purchase by signing a reservation agreement, which “secures” the selected condominium for you for a specific period of time. Once the reservation is finalized, you’ll receive all relevant documents for review, which we’ve listed here. At this point, it makes no difference whether you’re buying the apartment for your own use or as an investment.
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Budget
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Statement of Condominium Fees
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Minutes of Owners’ Meetings
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Energy Performance Certificate
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Lease agreement documents plus current rental information (for an investment property)
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Property Management Agreement
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Proof of insurance
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Sample purchase agreement
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Declaration of Division.
Depending on your preferences, we can review the documents together, you can choose to discuss them with friends and family, and/or even consult a lawyer specializing in real estate law. The effort required to review and understand the content of these documents should not be underestimated. When you buy a condominium, the focus is on the purchase of the property itself, but at the same time, you’re also joining a homeowners’ association that has already made decisions which you’ll be bound to follow exactly. Therefore, be sure to take enough time to study the documents.
If reviewing the documents reaffirms your intention to buy, we move on to the next crucial point: financing the purchase.
Here are some questions you should ask yourself when financing your apartment: Will I buy the apartment with my savings? Which bank would I like to partner with to make my dream of home ownership a reality?
What collateral does the bank require? What collateral do I have myself?
Here, too, there are many questions that you can clarify with your trusted bank before your appointment with the notary. Once you’ve worked out the formalities with your bank, your proof of equity, together with the financing commitment, serves as proof of financial security for the seller.
Once the consultation, property viewing, document review, and financing have been finalized, a notary appointment can be scheduled. Due to Germany’s very comprehensive consumer protection laws, you’ll receive the draft purchase agreement at least 14 days before the notary appointment. This leaves plenty of time to thoroughly review the agreement and clarify any questions you may have.
For many people, buying a home is their first interaction with a notary. But even first-time buyers have no reason to worry—because just as with the home-buying process as a whole, the procedure for a notarization appointment is clearly defined.
The notary serves as a neutral intermediary and legal facilitator of the transfer of the property and funds from the seller to the buyer and vice versa. Among other things, the notary is also responsible for ensuring that the purchase price becomes due only once the notary can guarantee the 100 percent transfer of the property to the buyer. After a friendly greeting, the notary reads the contract aloud. During this time, the buyer is, of course, free to ask the notary questions about the contract’s contents. The notary is legally bound to remain neutral. Once the contract has been read aloud and all questions have been answered, the buyer, seller, and notary sign the purchase contract.
To protect the buyer, the notary applies for the entry of a priority notice of conveyance in the land register after the notarization. This means that the buyer is already “noted” as the new owner.
This prevents the same condominium from being sold multiple times. Only after the priority notice of conveyance has been entered can the notary demand payment of the purchase price. Once the notary has provided written notice that the conditions for the purchase price becoming due have been met, it is up to you or your financing bank to transfer the purchase price to the seller within a specified period (at least 14 days). Once the seller has received the funds, the transfer of rights and obligations takes place on the first day of the following month. From that point on, you are the owner of the condominium, with all associated rights and obligations. From that point on, you have the use of the unit or receive the tenant’s rent, but you are also obligated, for example, to pay the building maintenance fees.
At the same time, the notary applies for the transfer of ownership in the land registry. This formal process can take a few months. After the notary appointment, the registration of the notice of conveyance, and the entry in the land registry, you are the definitive owner of the property.
