Partial sale land

First of all, let’s start with the basics, for those who have only heard of the “partial sale of a property”.

What does partial sale mean? How does a partial sale work?

A small definition – The principle behind the partial sale, is based on the sale and a subsequent royalty that you pay to your new part owner. So from the understanding the “user fee” is simply explained, with the comparison to rent or lease.

Partial sale at a glance:

• You sell a share (usually 10% – 50%)
• Financial company becomes part owner
• You retain the full right of use
• For this you pay a usage fee

Still in operation, whether in NRW or elsewhere:

Differences in the user fee

When buying a plot of land, it basically comes down to one factor, how big is the usage fee? Should you not have to sell very quickly, due to liquidity, you should think about the alternative mortgage loan anyway. Because, the user fee (disadvantage) is usually between 3 and 5% in the partial sale of land.

• Usage fee depending on provider: 3-5% p.a.

Example:

• Sold share: 100,000 euros
• User fee: 3-5% p.a.
• Cost: 3.000 – 5.000 Euro / year

So you pay an annual fee of 3,000 to 5,000 euros for the share sold worth 100,000 euros.

How is the value of your property determined?

If you do not know the current value of your land, it still needs to be determined. Central to this are, among others, key figures (such as the land area), its use (undeveloped land or used agricultural land, forest, springs, etc.). Important is the standard land value, which you can find in the standard land value map, but also an expert opinion. This is ultimately the basis for the concrete valuation.

Read more about the topic here:

• Rate property

Of course, the most sought-after are plots of land in the urban area, but many also sell agricultural land.

Comparison: mortgage loan on land

Compared to the mortgage loan, where you pay only 1%, already a significant disadvantage of the partial sale. In return, you do not have to go through the credit check of the banks. Another advantage, they get the purchase price almost immediately transferred.

At 1%, the annual savings are already 2,000 – 4,000 euros. In 10 years, a considerable difference.

• Advantage: More favorable conditions
• Disadvantage: Credit checks

So, if you have a lack of liquidity, so that you are forced to sell a plot of land immediately, then a partial purchase is a possible option. Because you save many steps in the sale of land.

On the other hand, you have high follow-up costs. Therefore, a comparison is worthwhile! Sale? Partial sale? Mortgage loan on the property? My recommendation is clearly the mortgage loan, because with it you save 2/3 of the costs (comparison partial sale). If you need money fast, really fast, the partial sale is definitely an option.

So always consider both options, partial sale and real estate loan.

Step 2: Total sale from the plot

All partial sale providers also give you the direct option of selling your property in full in the foreseeable future. The buyer is then the previous part owner, who thus becomes the sole owner of the property.

Here I give in the guide partial sale property still 2 valuable tips:

1. Total sales and inflation
2. Agree usufruct

Quickly explained:

Total sales and inflation

Assuming you sell in 15 years, inflation (demonetization) has increased ~ 32%, at 2% / year. So if you are made offer below 32% appreciation, not even inflation is compensated. That’s why it’s worth taking a look at the provider comparison.

Agree usufruct

If you want to sell your property outright but continue to use it “until the end of your life”, agree on usufruct. The usufruct guarantees you a right of use until the end of your life (non-transferable).

Staying liquid.

How does the part sale of a plot of land?

Let’s briefly summarize the findings again:

Difference sale and partial sale

In the regular sale of land, you sell your entire property, which means 100% of the shares of land. In case of partial sale of a land plot, you sell only a part of the property (land plot).

Most partial sale providers buy between 10%, 20%, 25% or even 50%, that is half of your property. For this you usually get, quickly and easily transferred the purchase price. This is the great advantage of partial sale!

Usage fee after the partial sale

For the further, sole use, you have to pay a monthly usage fee, the so-called usage fee. Depending on which provider you choose for the partial sale of your land, the amount varies from 3% to 5% (of the purchase price per year). Compared to the mortgage loan on your land (only 1%), already a significant difference for land sales.

Conclusion: partial sale of land makes sense? 3 options

Partial sale – If you need money fast, really fast (within a few weeks), due to cash shortages, then partial sale of your property is an option.

Sell and lease – Should you have a little time (more than a few weeks) you should rather think about selling your property and then lease it. Because especially in terms of inflation (total sale in the second step), you have some disadvantages in the partial sale.

Mortgage loan on your property – Important, talk to your bank. Even at an older age you can get loans. Many people are afraid of this and say “I won’t get a loan from the bank anyway”. Wrong! Therefore, talk with your bank and with 2, 3 alternatives. This way you pay only 1% instead of 3-5% (at the current interest level).

Tip. Also an option for forest areas with further management:

Partial sale XL: speculation tax, community of heirs & Co.

Read more about partial sale here – A look at costs of use, advantages, disadvantages, taxes, sale from joint heirs, divorce and much more. My recommendations for sellers!

• Partial sale property
• Partial sale provider comparison

Different layer types explained: A, B & C layer

In principle, a distinction is made between three types of location when searching for real estate:

• A-location (metropolis)
• B-location (large city / city with positive development)
• C-location (small town / city with stagnant development)

Why are location types important? It’s simple: As a real estate buyer, you have ideally thought about your goals before buying the property. Do you want to buy the property for personal use or as an investment? Is this a yield or investment property? Depending on the answer to this question, the location you should look at also differs.

So now let’s look at the different definitions.

A-location: coveted metropolises, such as Berlin and Hamburg

As a rule, metropolises and capitals are considered A-locations. They are sought-after places to live, as they are often home to internationally based companies. The economy is thriving, the education system has a lot to offer and life is never boring. Germany’s metropolises are also home to the most beautiful and historic neighborhoods. If you buy a property here, you can expect a high purchase price but a low return.

Typical for A-locations: expensive purchase price & low yields

Investment property purchase: Low risk & high purchase price

Due to the high purchase price and the low return, we advise you to look for investment properties in A-locations. After all, the high prices per square meter are hardly covered by rental income. In other words, due to the coveted demand in metropolitan areas, you can enjoy an increase in the value of your property at a low risk. Why low risk? The popularity of locations such as Munich, Berlin and Hamburg is highly unlikely to wane in the next few years – after all, more and more young people are drawn to these very cities.

Aim of a property in A-location: Later & profitable resale

If you do not expect a direct cash flow shortly after the purchase of the property, then real estate in an A-location is exactly the right thing for you. Yielding properties, on the other hand, are less likely to be found here. So here is a brief summary:

• Purchase price: High
• Yield: Low
• Advantage: Low risk
• Property type: Investment property
• Goal: Later, profitable resale

A-location in Germany: Examples

Which cities generally count as A-locations? Here according to population:

• Berlin
• Hamburg
• Munich
• Cologne
• Frankfurt on the Main
• Stuttgart
• Düsseldorf

B-location: economically strong major cities, such as Nuremberg and Leipzig

Properties in B locations, on the other hand, are characterized by their high returns. After all, B locations are close to popular metropolitan areas and are thus also considered popular places to live.

Typical for B-location: moderate purchase price & high returns

Yield property purchase: Moderate purchase prices & cost-covering rent

While the high price per square meter in A locations means that rents cannot cover these costs, this problem does not exist for properties in B and C locations. Thus, properties in B-locations are considered perfect yield properties.

Here are the advantages at a glance:

• Purchase price: Moderate
• Yield: High
• Advantage: Cost-covering rent
• Property type: Yield property
• Goal: Immediate cash flow

B-location in Germany: Examples

B locations include:

• Leipzig
• Dortmund
• Food
• Bremen
• Hanover
• Nuremberg
• Wuppertal

Somewhat outside the major metropolises are sought-after B locations:

C-location: Low-cost real estate with high risk

C locations are therefore also suitable for investment properties. These are locations with weak infrastructure and only low or moderate economic strength. Here you can enjoy a lower purchase price, but must also expect higher risks, such as vacancy, rent arrears & Co. The yield properties here are therefore characterized by a high risk.

Real estate in C location briefly summarized:

• Purchase price: Low
• Advantage: Real estate bargain
• Property type: High risk return property
• Goal: Immediate cash flow

Here a typical prefabricated building in C-location:

Conclusion: Decide depending on the type of property

While A-locations are sought-after metropolitan areas, B-locations are characterized by their economic strength. C-locations are less desirable and have a weak infrastructure, but even here it can be worthwhile to invest in an investment property. It is best to consider in advance what goal you are pursuing with your property purchase and what type of property you are interested in. Then the choice of location will be much easier for you. Once you have decided on an A, B or C location, the second step is to analyze the macro, meso and micro location.

Learn more here: Macro, Meso & Microlocation

Tip. Read here the complete comparison between A-location, B-location and C-location including examples on my new project for real estate buyers (Immobilien-Erfahrung.de):

• Property location: A-, B-, C-location – external

Living comfort and a prestigious effect

A villa means exclusive living comfort and a representative effect to the outside, a special challenge for real estate agents, or luxury agents. In addition, a villa is interesting as an investment property. The term villa originates from Roman times and means manor house. Today, not every villa is also a luxury object. Sometimes country houses located in urban centers are also called villas. In any case, villas are distinguished by their size, by a characteristic room layout, as well as by the land areas surrounding them.

In any case, there is a need for villas in today’s real estate market. Prices for these properties have risen sharply in recent years. The most sought-after villa locations are located in the catchment area of large cities.

Buy a villa? Our most exclusive properties

Our most exclusive properties you will actually not find online in our real estate portal. Celebrities, industrialists, sellers from business and media are looking for discretion and therefore rely on real estate experts with an internal circle of buyers and filtered communication channels. Are you looking for a villa in Germany, Europe or the USA? We have first class properties that you will not find anywhere.

• Off Market Properties
• Contact

Price development of luxury villas: Low interest rate phase

Since villas are highly sought after, especially as investment properties, and many investors are investing in real estate due to the period of economic recovery and low interest rate policy, the prices of these properties have also increased enormously. Over the long term, however, this price trend is by no means exceptional. Since 1975, real estate prices have risen only moderately. Towards the end of the last century, prices fell somewhat, but since the economic upswing they have been on the rise again.

Villa as a purchase object: Invest, instead of “only” live

In which real estate to invest? From an investor’s point of view, the villa has a special significance. It serves primarily as an investment object.

Secondarily follows the own use as a residential property and in many cases the new owner rents the villa. In vacation regions these objects are often rented out as vacation homes. This means that income can also be generated from the purchase of a villa. Indeed, the maintenance of these properties is also associated with high costs.

Checklist: Construction, extras and security

Basically, several components play a role in the purchase of a villa. These include, among others and very roughly simplified:

• Location of the property
• Property
• Living space
• Main house, if necessary adjoining houses
• Height of the rooms
• Furnishings and extras
• Security and accessibility

Location: the most expensive neighborhoods

.

Many villas or country houses are located in the periphery. Whether in Berlin, such as Grunewald or in Los Angeles Beverly Hills. There, therefore, a high degree of mobility is necessary for residents. Some villa colonies, on the other hand, which are mainly found in large cities such as Paris are very centrally located.

The upscale residential environment, where most villas are located, is the decisive factor for a higher purchase price. However, the plot on which the property is located is also crucial. The property serves as an individual leisure oasis. It is private and therefore does not have to be shared with anyone.

Luxury you have to be able to afford

However, the disadvantage of this is the high cost of maintaining the garden area. Often, a separate gardener must be appointed. A villa is also characterized by its spacious room layout. These rooms can be adapted to individual needs. Here too, however, it must be remembered that the maintenance and cleaning of these rooms involves a lot of effort. Most villas are equipped with relatively high rooms. They convey a feeling of individual freedom. Their flood of light gives a feeling of well-being. However, the disadvantage of this is the high heating costs

Tip: If you come at this point already in the calculation, buy rather a number smaller! Here you can find my guide: Buy a house.

A villa is great for customizing. If several people occupy the property, so everyone has his own retreat there.

Villa as a rental property: Rent instead of buy?

If you want to buy a villa, you can consider renting out the property. This is an additional income opportunity that justifies the investment costs, at least in the medium term. However, there are tax issues to consider here.

Rental agreements offer tenants certain freedoms with regard to the interior design and the layout of the outdoor facilities. In the case of vacation villas, individual use is particularly interesting for vacationers. These villas are mainly located on the North Sea and the Baltic Sea. Also islands like Sylt or Helgoland offer villas as vacation domiciles. Many investors use the opportunity to buy a villa in such locations and rent it to tourists. When buying a villa, it should be noted that the investment must be planned very carefully due to its size.

• Reading tip: Renting from the apartment house

First, you should in any case assess whether an object offered for sale is really a luxury property or a villa. The prices for these properties are significantly higher than for normal objects. Whether it is a luxury property, describe the following criteria:

• The exclusive location
• A generous equipment
• The presence of special details

When is a villa a villa? Assessment

An exclusive location is particularly when the property is located in an upscale residential environment or in a special area. This includes islands, properties with sea views or properties in central locations in large cities.

Well-equipped villas also have their own pool area, a large terrace and a well-kept garden. Fitness rooms or a covered swimming pool can also be part of the luxury equipment. Special details are, for example, the provision of house staff or a gated community. This is a residential area with restricted access. However, this still has secondary importance in Germany.

Evaluation of the property: house or apartment building

• Valuing a house
• Valuate multifamily house

Costs: purchase price and incidental purchase costs

When selling a property, there are also costs that both the buyer and the seller have to pay.

Who pays which incidental purchase costs?

Explained in Quick:

1. Realtor – Under the new Real Estate Realtor Act, the cost of the broker is split 50/50 (buying from a private party); previously only buyers
2. Notary and land registry pays buyer
3. Property transfer tax pays buyer

This means that if you buy the property privately, under the new law – with reservations – the cost of the real estate agent would be divided in half. If, on the other hand, you buy through a company, such as a family office, the distribution is freely negotiable. In 98% of cases, however, the costs are borne by the buyer of the villa.

Checklist of ancillary costs: expert opinion to notary

These include, first and foremost:

• Value appraisal
• Energy certificate
• Broker’s commission
• Property transfer tax
• Speculative tax
• Notary and land register

The energy certificate, the real estate acquisition tax, the speculation tax and the notary fees are mandatory. The value appraisal and the broker commission are optional if these services are commissioned.

Individual cost factors

Most other items depend on the price of the property and vary individually. A speculation tax is incurred if the property is resold within a certain time after purchase. The tax authorities then access the profit made.

Notary fees and land register

The notary fees in Germany amount to 1.5% to 2% of the notarized sales price. In most cases, only the buyer of the property bears the notary costs.

Who bears the costs?

As a rule, the buyer.

Property transfer tax of the federal states

The real estate transfer tax is divided between buyer and seller and amounts to between 3 % and 6.5% of the notarized services for land and building, depending on the federal state.

Who bears the costs?

As a rule, the buyer.

Energy certificate and landlord info

The Energy certificate is prescribed at $ 300 for a simple certificate and $ 500 for a detailed certificate.

Who bears the costs?

As a rule, the seller.

Tip. Here we have collected for you various basics for renting. What else is important, besides the energy certificate?

Broker commission and cost allocation

The brokerage commission varies by state and ranges from 5.95% to 7.14% of the agreed sales price. The bearer of these costs is either the buyer or the seller, depending on the constellation. In some cases, these costs are also divided proportionately.

Tip. The commission amount is negotiable.

Who bears the costs?

As a rule, the buyer.

Buyer Tips: Owner occupancy / rental

1. Buy a house
2. Buy a multi-family house

Own use: buy a house

Buying luxury real estate – How many luxury properties are sold each year in Germany? There are less than 400.The market is extremely exclusive. Good contacts, a long-standing network, discreet offers and inquiries. Welcome to the world of luxury real estate. We show you how many square meters you get for your money. In New York, Berlin, Hamburg, Tokyo and Dubai. Buy and sell in the most expensive cities in the world.

• Buy a villa for the family

Build or buy?! Apartment houses

Your idea has manifested and your dream of a house is becoming a reality. You’ve already looked at a few properties, compared prices and budgeted for your home purchase. Before you enter into closer negotiations with sellers or reserve a property, you should plan your home financing and determine your terms. The more professionally you proceed and the more concretely you plan, the less complicated the house purchase will be, from the idea to the financing to the notarization to the conclusion of the contract. Then everything is ready for the renting from multifamily house.

• Build or buy?! Apartment houses

Alternative: buy exclusive condominium

The decision to buy a condominium (ETW) is made by most buyers for two reasons. The buyer wants to use the apartment to live in it himself. Other buyers are looking for a financial investment that will provide a good profit in the medium or long term.

• Buy an exclusive apartment

First time selling a villa?

If you’re facing selling a villa for the very first time, you’re probably asking yourself the typical questions that come up in any house sale and a few more. Especially if you are looking to sell an inherited house or villa and accordingly have no prior experience in real estate, here’s a little insight into the process and the costs you will face as a seller.

When selling a property, there are also costs that both the buyer and the seller have to bear.

Tip. We get the optimum out for you as a seller

Here you can find our contact persons: Contact.

You as a seller know that renowned real estate agents, like ours, take over the entire sale and process from valuation to exposé to notary and purchase contract. The most asked questions refer therefore, at the beginning, almost always to the cost factor with the mansion sales. Let us therefore start with this question:

Who pays which ancillary purchase costs?

Explained in Quick:

1. Real estate agent – Under the new estate agent law, estate agent costs are split 50:50 (buying from private); previously only buyers
2. Notary and land registry pays buyer
3. Property transfer tax pays buyer

Checklist sale: cost factors

These include, first and foremost:

• Value appraisal
• Energy certificate
• Realtor’s commission
• Property transfer tax
• Speculative tax
• Notary and land register

The energy certificate, land transfer tax, speculation tax and notary fees are mandatory. The value appraisal and the realtor’s commission are optional if these services are commissioned. Most of the other items depend on the price of the property and vary individually. A speculation tax is incurred if the property is resold within a certain period of time after purchase. The tax authorities then access the profit made.

Notary fees and land register

The notary fees in Germany amount to 1.5% to 2% of the notarized sales price. In most cases, only the buyer of the property bears the notary costs.

The notary fees and land registry are usually paid by the buyer.

Property transfer tax when buying a villa

The land transfer tax is divided between buyer and seller and amounts to between 3.5% and 6.5% of the notarized services for land and building, depending on the state.

The notary fees and land register is usually paid by the buyer.

Energy certificate for all properties

The energy certificate is prescribed with $ 300 for a simple certificate and with $ 500 for a detailed certificate.

The cost of the current energy certificate is usually borne by the seller.

Realtor costs

The realtor commission varies depending on the state and is between 2 % and 7 % of the agreed sales price. The bearer of these costs is either the buyer or the seller, depending on the constellation. In some cases, these costs are also divided proportionally. Tip. The commission amount is negotiable.

As a rule, the buyer bears the realtor costs.

Properties with multiple owners

The situation becomes somewhat more difficult when a property has multiple owners.

Especially in the case of villas, this can be the case. If the property is sold, it must always be unanimous among the owners. If this is not the case, the owner who wants to sell the property must bring a partition action.

Action for partition is time-consuming and costly

Heirs: community of heirs and fractional community

Villas are often real estate that has been inherited. Therefore, it may happen that several heirs are registered in the land register. If this is the case, the owners are listed in accordance with Section 47 of the Land Register Code. Their shares are levied ideally. If several owners are registered, this is a community of heirs in accordance with §§ 741 ff of the German Civil Code.

In the case of a community of heirs, the situation is somewhat different. If an heir brings a partition action, the property is put up for auction and the respective heir receives only his share of the sale proceeds. In the purchase agreement, all shareholders on the seller’s side must be mentioned by name. The respective share ratios are also listed in the purchase agreement. This is particularly important for the sellers, because the proceeds of the sale will be divided among them on a pro rata basis after the sale.

For the buyer of the property, on the other hand, this circumstance plays no role. However, problems could arise during the notarization process. Especially if one co-owner is represented by another at the notary appointment. In this case, a written power of attorney is required in any case.

Inherited a villa? Read more on the subject here

• Property and inheritance

Divorce: sale after separation

If married couples are indicated in the land register, it is to be assumed that they can sell the property only jointly. This occurs primarily in the case of divorce. The legislator assumes that both spouses have tacitly concluded a joint ownership agreement when purchasing the property. This is regulated in Section 749 (II) of the German Civil Code.

If one spouse is registered as the sole owner, he or she can also sell the property alone. The non-registered spouse only has to agree if the property is the entire property of the marital community. (§ 1365 BGB).

Selling a villa after divorce? Read more about the specifics in the topic here:

• Property and divorce

Vendor Tips: Owner-occupier/landlord

Want to learn even more about selling real estate? Read more about houses and apartment buildings here, depending on what type your villa is, there are specifics to consider here as well.

1. Selling a house: Villa for one household
2. Multi-family house: villa for several parties

House for sale: Villa for one household

Single-family houses are characterized by the fact that they are inhabited only by one family, a couple or a person living alone. They have a garden, which is also owned by the owner. Not all single-family houses are inhabited by their owners. There is also a possibility to rent a family house with a garden. In almost all federal states, single-family houses enjoy great popularity as a form of housing. Accordingly, there is a great demand in the real estate market.

• Sell your house

Multi-family house: villa for several parties

If you should decide to sell your house privately, it means a lot of time investment. From the appraisal to the creation of the exposé, to customer approach and sales phase, months pass without market knowledge. In all areas, above all, the location counts, not only in the sale of apartment buildings.

• Sell your aparment house

With the conclusion of a purchase contract, the financing is already under the umbrella. The bills from the broker, notary, land registry and tax office come as soon as the loan is fixed. Because of this, the credit is often underestimated. Back to German Real Estate Overview.

Additionally, in the following there may be slight grammatical errors, as this article was written by a German tax expert. This does not detract from the quality of information.

What Percentage are Incidental Purchase Costs?

20% ancillary building costs should be included in the loan at least, in addition to the purchase price, and are quite realistic.

~ 20% of the purchase price

The 4 Biggest Additional Costs when Buying Real Estate

The overview shows the 4 largest additional costs you expect when buying a house. But what other costs are involved in building a house? Find out more here: House construction & the costs that come up.

Fees: Notarization of the Purchase Contract by Notary

The fees for the notary appointment are probably one of the largest items in the additional costs of the house purchase. The notary fees are fixed and may not deviate from these in any direction, but even these are quite high.

~ 1,5% of the purchase price

As a rule of thumb, about 1.5% of the purchase price has been set – and this only for the signature of the purchase contract. So if you purchase a property with a purchase price of 100,000 Euros, the notary’s fee is 1500 Euros, which, in Germany, is usually paid for by the buyer.

The exact fees for notaries in Germany are laid down in the notarial fee schedule, but can also be calculated online.

• Read more here: Notary and Purchase Agreement

Taxes: Real Estate Transfer Tax

As soon as the contract has been signed at the notary and the purchase agreement has been notarized, the buyer will receive mail from the tax office. Next, the purchase tax is demanded from the buyer.

This is incurred somewhat differently. Normally it amounts in Germany round about 3% – 6% of the purchase price of the real estate. Since the land transfer tax is a state tax, meaning each state determines their individual rates land transfer tax rate.

In some federal states, however, such as Hamburg, Berlin and Saxony-Anhalt, it is 4.5% of the property purchase price. For a purchase price of 100,000 euros, for example, you therefore pay another 3500 / 4500 euros for the land transfer tax.

Reading tip: Get to know tax planning options, from cooperatives to family foundations: Save taxes with real estate

Purchase price 100.000 Euro

This debt should be paid immediately, because only when the amount has been received by the tax office will the latter issue the so-called clearance certificate. This certificate is mandatory for the transfer of the new owner to the land register. This is arranged by the land registry office and costs again fees, which are comparatively low.

3.5 – 6.5% of the purchase price

Commission: Brokers Calculate their Share

Whoever buys a property or a plot of land through a real estate agent must of course include the commission to the agent in the overall calculation. You will usually receive the invoice from the real estate agent directly after the notarization.

How high the commission is varies and depends on various factors, such as the region. In most cases it varies between four and six percent of the purchase price of the property.

With a property purchase price of 100,000 euros, you pay between 4,000 and 6,000 euros only for the real estate agent. However, it is important to know that it is definitely worthwhile to negotiate with the real estate agent’s commission, as it is known that this is associated with a large amount of leeway.

A recommendable, total commission of 3.48 percent including VAT is a recommendable and realistic value.

~ 3.48 % of the purchase price

Supplements: Credit Interest and Installment Surcharges

The banks would like to take part in a house sale, of course, and not only through the loan interest rates. In addition to the negotiated loan interest rates, you are charged costs that are additional and usually not expected by the buyer.

These costs are not clearly visible at first glance and therefore banks are deceiving their customers. Such hidden costs can occur in the form of monthly provision interest on the unpaid portion of the total loan.

There, for example, 0.25% is charged, which the customer does not expect and which adds up to the mass. For a loan amount of 100,000 euros, this is about 250 euros per month, which you do not expect.

Additional, Hidden Costs

But there are other hidden costs that you don’t expect. These include account management, which some banks charge as a fee, but also installment surcharges if you get part of the loan paid out, depending on the progress of the construction.

With your loan, pay special attention to exactly what is written in the small print, ask about all unclear points and only sign if you are certain about all obligations.

To be on the safe side, have your bank calculate the so-called total effective interest rate or the actual effective interest rate. There, all service charges are listed in detail and clearly arranged.

Assessor & Renovation – Potential Additional Costs

Another factor that does not apply to all properties is the cost of appraisers and renovators.

Particularly with older real estate it is meaningful to hire an appraiser before the purchase, who examines the real estate down to the lattices. This includes, for example, checks on moisture and pollutants (especially for properties dating from the 1970s). Such appraisals are carried out by independent experts such as architects or civil engineers but also real estate experts.

The costs here are very different, as it depends on the type of expertise and the time required. Depending on how good the report is, possible renovation work in the future may be necessary, which should be incldued in the purchasing price as a reduction. For this reason, these assessments are critical.

Whether it is a new heating, new windows or the restoration of the roof, the costs for this case also vary greatly. Here you should note that there are usually costs for general renovation before moving in. New floors, different wall colors, a new kitchen or even tearing down a wall.

All these things again cost money, which should not be underestimated. Often there are more costs than planned, because something goes wrong, but was more expensive than calculated or small things are missing. Also note that many renovation works cannot be done by yourself. So you need craftsmen and experts to help you and they will of course calculate their working time. Before you decide on a house, think about which work would still have to be done, what you would like to renew and how much the costs for such renovation work will be.

Conclusion: Calculate additional purchase costs

In Germany, for a property with a purchase price of 100,000 euros and a loan of the same amount, expect additional costs of 9,000 to 12,000 euros.

If you do not include them in your loan amount, they must be deducted from your own capital. Such unexpected service charges should not be underestimated and can vary enormously from property to property. The higher the price of the property, the higher the service charges you expect.

• Back to our full guide on Real estate Taxes in Germany.