Documents for the bank: photos, energy certificate & purchase contract

Financing requests for real estate purchases are part of your bank advisor’s daily business. If you want to score points with your financing request, you should provide all important documents directly. This saves your bank time and energy, as it does not have to request extra new documents. Instead, the financing plan can be set up quickly and the financing process can be completed. So that you can enjoy a quick financing approval, we recommend that you prepare your documents in two folders:

1. Folder: Credit rating
2. Folder: Object

Now let’s take a closer look at the object folder:

House & apartment exposé: master data of the property

First of all, the bank needs a property file with the basic data of the house or apartment. Finally, the bank must know the master data of the property. You can either create an exposé or a fact sheet for this purpose.

You have the following options:

• Real estate exposé
• Fact Sheet

Photos of building and plot

In addition to the most important basic data, the bank also needs some photos of the object, so that it can get a visual impression. Make sure that the pictures have been taken in good light. Daylight is best suited for this purpose. In addition, you should give a lot of importance to a good quality of the photos, so that also details of the property can be seen. The bank not only needs photos of the property itself, but also of the immediate surroundings and, if necessary, of the common property.

You should attach photos of this:

• Property
• Community property
• Immediate surroundings

Parcel map, floor plan & insurance

In addition, the bank needs the cadastral map of the property, as well as the site plan. Also the floor plans of the property, as well as the living space calculation are to be attached. Another important document is the extract from the land register. The land register is an official, public register and contains legal relationships to the property. In addition to land charges, mortgages and liens on real property, it also contains further information on the respective ownership and residential relationships.

The following documents must also be forwarded to the bank.

• Parcel map and site plan
• Floor plans
• Living space calculation
• Land register excerpt
• Building insurance
• Energy certificate

In order for the bank to get an accurate picture of the property, the hallway and site plans are especially important:

Special case: Rental agreement for rented property

You can buy a property rented or unrented. If you buy a rented property, you must also give the rental contracts to the bank. In the case of unrented property, this step is of course omitted.

Special case: Homeowners’ association (WEG)

If you purchase a house or a condominium as part of a condominiumowners’ association (WEG), add the declaration of division to your property folder, as well as relevant agreements, the last three minutes of the owners’ meetings, the collection of resolutions and the WEG administrator’s contract. The statement of charges and the property tax assessment should also be in your folder.

Here is a brief overview:

• Declaration of division – with certificate of seclusion
• Collection of resolutions – last 3 owners’ meetings
• WEG manager contract
• House service charge statement
• Property tax notice

At the end: draft purchase agreement

The last object in the folder is then your draft purchase agreement, which thus completes the real estate folder.

Reading tip: Create purchase contract

Object folder for the bank: checklist

Here again the most important documents summarized at a glance;

1. Exposé / fact sheet of the property
2. Photos of building and plot
3. Parcel map, floor plan, insurance & co.
4. Rental contract (if available)
5. Documents of the WEG (if available)

Once you have all these documents together, nothing stands in your way of successful financing!

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Calculate purchase price: Important factors

To calculate the purchase price depends on several factors. The location of the property, its location, as well as its year of construction are important. Once the purchase price of the property has been determined during the property valuation, the ancillary purchase costs must be added.

The final purchase price is therefore composed of

1. Purchase price of the property
2. Incidental purchase costs

Incidental purchase costs: land transfer tax, broker & Co.

Not all incidental purchase costs are the same in all federal states. Some incidental costs, such as the real estate transfer tax, differ from state to state. Sometimes it also depends on whether you are buying a house, an apartment or an apartment building. The investment strategy, i.e. income property or investment property, can also have a different effect on the ancillary purchase costs. If you also buy through a real estate agent, you will also incur a broker’s commission, which also varies by state.

Reading tip: Real estate transfer tax by federal state

So what counts as an incidental cost of purchase?

• Real estate transfer tax (3.5-6.5%)
• Notary fees (1.5%)
• Land register entry (0.5%)
• Broker commission (3.57-7.14%; 50:50 for private purchase)

in a home of one’s own in a dreamlike setting. What are the ancillary purchase costs here?

Example: Buying a house in NRW including incidental purchase costs

We will show you how these ancillary purchase costs add up to the original purchase price using this short example. Let’s assume you want to invest in a single-family home in NRW. To keep the example simple, let’s assume that after technical and commercial inspection the purchase price is 100,000 euros.

• Purchase price for house in NRW: 100,000 euros

Calculate real estate transfer tax in NRW

Depending on the federal state, the real estate transfer tax ranges from 3.5% to 6.5%. Our property is located in NRW. One look at the table and we find out: The property tax in NRW is 6.5%.

• Real estate transfer tax in NRW (6.5%): 6,500 euros

Notary costs: sealing the purchase contract

You will also incur notary fees. After all, the purchase agreement must be sealed. You can estimate this amount at 1.5% of the purchase price of the property.

• Notary fees (1.5%): 1,500 euros

Land register entry Costs: Transfer of ownership

The land transfer tax has been paid, as well as the notary? Very good! Next comes the land register entry. Here, the property you have purchased is now registered as your property. For this transfer you should calculate 0.5%.

• Land register entry (0.5%): 500 euros

Broker costs: commission & distribution

If a broker is involved, the broker’s commission is still due in the last step. It is important to note here: If it is a private real estate purchase, the broker’s commission is split 50/50 between the buyer and seller. However, if the real estate purchase is a commercial purchase (for example, on behalf of a company), then the commission and distribution are freely negotiable. The amount of the broker’s commission varies depending on the federal state. In NRW it is 3.57%.

• Brokerage commission (3.57% [3,570 / 2]): 1,785 euros

Conclusion: Purchase price and ancillary purchase costs at a glance

The actual purchase price of the property is therefore 100,000 euros. If the ancillary purchase costs are added, we are then at 110,285 euros, which must be invested in total. Our tip: Right from the start, make a concise checklist of the ancillary purchase costs that you will incur and add these to the original purchase price. This prevents any nasty surprises with regard to financing.

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✓ A guidebook
✓ All facts
✓ Insider tips
✓ Purchase checklists

Learn step-by-step the home buying process and lots of insider tips!

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Definition: What is a ground lease?

You have found a house or an apartment building you are interested in, but it is located on a leasehold land? Or you have found a suitable property and it is subject to a ground lease? What does this mean? Simply explained, hereditary building rights mean that the right of ownership and the right of use are permanently separated. A distinction is made here between two parties: The ground lease provider and the ground lease taker. The ground lease holder leases the land and is then allowed to use the land in return for an annual ground rent.

Here is a summary of the ground lease:

• Ownership and usage rights permanently separated
• 2 parties: ground lease grantor and ground lease taker
• Leasehold in return for building rights

Advantage of a ground lease: Favorable purchase price

Of course, a ground lease has both advantages and disadvantages. Probably the biggest advantage is that the purchase price here is significantly lower than usual, since the purchase price for the land itself is omitted. Leaseholders also benefit from reduced ancillary purchase costs.

The purchase price of a property on leasehold land is significantly lower

Disadvantage: Monthly ground rent

In return for being allowed to use the land, you have to pay a monthly or annual ground rent to the owner of the land. In addition, the mortgage lending value of your property decreases significantly because the value of the land is constantly decreasing while the ground rent incurs costs.

The two disadvantages of a ground lease at a glance:

• Payment of the ground rent causes costs
• Collateral value of the property decreases

Conclusion: Is a ground lease worth it?

Buying or building a property on leasehold land therefore brings different advantages and disadvantages. While you can enjoy a low purchase price, a regular ground rent is incurred at the same time. And the mortgage lending value of the property also decreases.

You can now find even more facts and tips about ground leases on my new project for real estate buyers (Immobilien-Erfahrung.de):

• Ground lease (external)

If you want to learn even more on the subject of buying a property, whether owner-occupied or capital investment, numerous articles, guides on the subject of rented vs unrented, as well as checklists, all free and 24 hours online available, with us!

Apartment, house, apartment building, everything for real estate beginners!

Now new on Immobilien-Erfahrung.de:

• Buy property: learn – external