What is the exact procedure for buying a house? Future owners often ask themselves this question when looking for their dream property. Find out more about the steps involved in buying a house.
Checklist House Purchase: Checking Finances
Many future owners have a clear idea of what their house will look like in the future. It should be spacious so that all family members have space in it. A large garden for romping around and relaxing should not be missing. You will be awakened all too quickly from this dreaming when it comes to whether all this is affordable. Therefore, before buying a house, we first have to look at our household book to find out: How much house can I afford?
Make a calculation of your income and expenses. This will give you an initial overview of your financial situation. The bill: rent equal monthly installment for the repayment of a loan unfortunately does not work. It is advisable to inform yourself about the amount of ancillary costs when buying a house, such as the land transfer tax and the notary and land register costs, in order to get an overview.
These additional costs should best be covered by your equity capital. So take a look at what you can bring into the financing from your own resources. In addition to income from overnight money and savings accounts, income from inheritances and gifts also count as equity capital.
Setting the budget framework
Once you have gathered all the information, you are welcome to make an appointment with one of our 550 consultants on site. Here you can ask the first questions you’ve asked and set a budget. Your income and expenses will be compared. On the basis of this information, we can provide you with initial information about the purchase price you could afford for a property. In this phase, you do not yet conclude a binding construction financing agreement, but receive a guideline value that shows you how much you are able to spend on a property.
Use our building interest calculator to determine the current building interest and find out which monthly rate you have to expect for your construction financing.
The next step on the checklist for your house purchase is the inspection. Searching for your dream property you will find it online, via print ads, via offers at the bank or simply during a walk. The ways are various, just like the real estates, which are offered. If you already have concrete ideas about what your future home should look like, you can implement your ideas with the help of a property developer or an architect.
Old buildings or finished properties are usually sold through an estate agent like Chestnut Park. While with property developers you only get an impression of your future home on the basis of exposés and building plans, with finished buildings you can already inspect them before signing the contract.
During the visit
Before concluding a purchase contract, it is advisable to visit several houses. Often the ideas about what your property should achieve are still very vague, so that with each inspection you get a feeling for what you want from a property. In order to be able to check the lighting conditions optimally, it is a good idea to visit the property in daylight.
This way you can already make an initial room distribution in order to guarantee an optimal use of the premises. Cellars and attics are also better illuminated. Let us explain everything in detail and show you all the rooms, including the plot, so that you have a good overview of the property. Photos will help your memory so that you can easily distinguish between the individual properties even after several appointments. Make a note of any questions that have arisen before the date on which you want to view the building. You will then have the opportunity to clarify any ambiguities on site.
Possible questions relating to the circumstances of life:
- Are there kindergartens, doctors, schools, shops nearby?
- How long is the way to work?
- Is the number of rooms sufficient?
- Do you need a second car?
Possible questions concerning the structure of the building:
- What is the condition of the house?
- What already exists and what needs to be readjusted? (Underfloor heating, insulation, etc.)
- Are the windows well insulated?
- Where do the supply lines run?
- Do rights of way have to be observed?
Particularly in the case of old buildings, you may incur additional costs for modernisation in addition to the purchase costs. It is therefore advisable to carry out the inspection with an architect or a surveyor.
He can tell you exactly what needs to be done and what defects need to be remedied. This enables you to calculate the costs more accurately.
After the inspection: At the local court
After the inspection, it is worth making an appointment with the responsible local court to have a look at the extract from the land register for your favourite property. The sheet provides information about registered encumbrances and the ownership of the property. You will also find out whether rights of way exist or whether the house is on a plot of land with a heritable building right.
Checklist House Purchase: The Notary Date
You arrange the notary appointment at the same time as the bank appointment. The notary appointment is one of the most important events in connection with a house purchase. The signing of the contract seals the pending change of ownership, which then also has legal validity.
As the buyer, you have the choice of which notary to make an appointment with. However, you should not sign a purchase contract until you have received a binding financing confirmation from the bank. You can also sign the construction financing immediately. Then, however, the notary appointment should be within the two-week revocation period so that you can still revoke the loan in an emergency.
These documents are required by the notary
In order for the notary to be able to draw up the purchase contract, in addition to information on the name, address and dates of birth of both parties, he also needs information on the object. In a further step, he checks the information from the land register, for example to determine registered encumbrances. Information is usually provided by both parties to the contract.
Once the contract has been drawn up, one copy is sent to each of the contracting parties 14 days before the notary’s appointment. Use this time to read the contract carefully and have it checked by a lawyer if necessary. Take notes and formulate requests for changes that you can make during the notarisation meeting. Both parties must be present on this day. The notary reads out the purchase contract aloud and notes the desired changes. In addition, it is determined when the purchase price will be transferred from the buyer to the seller. If both parties agree on the modalities and the wording of the contract, it is signed.
After signing the contract
After the appointment, i.e. after the contract has been signed, the notary takes care of the notice of conveyance. It is entered in the land register and marks an impending change of ownership. With the signature of the purchase contract, the buyer is not yet the owner of the property. The object of purchase changes hands only after the modalities stipulated in the contract have been fulfilled by the seller or the buyer. This essentially concerns the transmission of the purchase sum, but can also mean the defects that the seller has to eliminate before the sale of the property. Only if all conditions are fulfilled, the conditions for a change of ownership are created.
After the preliminary notice of conveyance, the notary reports the real estate purchase to the tax office. They determine the real estate transfer tax, which can turn out differently depending upon Land of the Federal Republic. As a rule, it lies between 3.5 and 6.5 percent of the purchase sum. The tax office now sends a letter to the buyer asking him to pay the sum. Once the amount has been paid, a letter is again sent from the tax office to the notary with a so-called clearance certificate. Without this certificate, a change of ownership is not legally possible. If the buyer has complied with his payment requests, he has consequently transferred the land transfer tax and the purchase sum, the notary has the new owner entered in the land register. The priority notice of conveyance is deleted and the sale process is completed.
Entry in the land register
The land register itself consists of a total of five parts:
- Inscription: gives information about the responsible district court, the land register district as well as the number of the page.
- nventory: Here the size and location of the property is shown and.
Rights of way and possible encumbrances are noted.
- Department 1: identifies the owner
- Division 2: Encumbrances on the property (insolvency proceedings, compulsory auctions)
- Division 3: indicates mortgages, land and annuity debts
Entries in the land register are always made when serious changes are made to the land or property. This includes, for example, land consolidation or an extension to the house. If an existing construction loan is transferred to another bank or if there is a change of ownership, this is also recorded in the land register. As a rule, the notary arranges for the entries to be made.
The costs for the notary are among the usual ancillary costs for a property purchase and are paid by the buyer after conclusion of the purchase contract. For this purpose, the notary sends an overview of the fees incurred to the buyer. This includes, among other things, the fees for the land registry and the execution of the purchase, but also a consultancy fee and the fee for the notarial confirmation. The notary costs are based on the purchase price of the property, so that you can expect about two percent of the purchase price.
Checklist home purchase: An overview of the individual steps
Many people understandably lack the routine of buying a home. If you have chosen your object of desire and now want to finally live in your own home, it makes sense to follow a certain procedure when buying a home, so that the purchase of real estate works smoothly. Below, we summarize all steps again clearly arranged.
1. Check your own financing
Before you start looking for real estate, you get an overview of your financial situation and reserves. The result is a budget frame that shows how much house you can afford.
You have found a property that interests you? Make an appointment with the owner or broker. In general, it requires some sightseeing before it comes to a home purchase.
3. Fix financing
You found your property? Make an appointment with the bank to fix your mortgage lending.
4. Arrange a notary appointment
Parallel to the bank appointment, you arrange an appointment with the notary to sign the purchase contract.
5. Sign a loan agreement
After you have agreed with the bank on the terms of your loan, the contract is sealed with your signature. Attention: There is a cancellation period of two weeks, therefore the notary appointment should take place during this time.
6. Sign the purchase contract
Now also the purchase contract is signed. Change requests of both parties can be included in the contract during the authentication date.
7. Purchase price and all additional costs paid
The loan amount will be transferred to the seller. Brokerage costs, notary fees and land transfer tax are also due.
The key handover is the last step on the way to the home. After paying the full purchase price, arrange an appointment with the seller for the key collection.
As a rule, the time from the first inspection of the later purchase object to the transfer of ownership is four to six months. This time requires a smooth process of buying a home. The actual duration is however very individual.