Looking to Buy? Take Your Time

This blog has covered the topic of renting an apartment many times (in posts by Hyde and Chloe) and I have written a bit on the topic of home ownership. But where do you start if you are looking to buy property in Germany? The first stop for anyone interested in property is immobilienscout24.de – it is a website that compiles available properties from the entire country, and the search features are powerful enough for you to narrow down according to your exact criteria. Assuming that you read German and that your budget is big enough, this may be sufficient in helping you find a home.

For everyone else, it will take a larger investment of time than you might be used to in North America or England. Germany is not a country of property owners; most people here rent their accommodation long-term. For those who do own their homes, turnover is very low (Geoff wrote about this a while back, too). Germans tend to buy a house and then live in it for the rest of their lives, passing it on to their children. Houses in Germany are built for the long-term (as in everything they do, the Germans strive for perfect rather than sufficient) and the prices will reflect that. Starter homes for under €100k are unheard of, unless they are just being sold as a tear-down. Apartments can be bought in this price range, but are probably smaller than you might be hoping for.A few tips on how housing is described:

  • Eigentumswohnung is a condominium: it’s an apartment you own
  • Freistehendes Einfamilienhaus: single-family home (detached)
  • Doppelhaushälfte: semi-detached home (duplex)
  • Reihenhaus: row-house or terraced house

Housing in Germany is described in terms of rooms, rather than the count of bedrooms and bathrooms. For instance, below I do a search for a 5-room apartment. This most likely includes living room, dining room, and 3 bedrooms. There may be 1 or 2  bathrooms, but rarely more. Never assume that there is a built-in kitchen (although this is more likely with buying than with renting). For converting from square meters to square feet, a factor of 10 is usually a decent approximation (1m = 3.3ft; 1m^2 = 10.8ft^2)
A quick search on Immobilien Scout today reveals the following availability of places to buy for under €500,000 for some of the major cities:

5-room apartment, 120 – 180 sq meters (about 1200-1800 sq ft)
Berlin: 900 – plenty to choose from!!
Munich: 12 in total
Hamburg: 87
Stuttgart: 62
Frankfurt: 63
Düsseldorf: 74

Single-family house,  140 – 250 sq. m (about 1400 – 2500 sq ft),
Berlin: 511 – again, by far the most selection
Munich: 5 offers (the WHOLE city!)
Hamburg: 124
Stuttgart: 34
Frankfurt: 55
Düsseldorf: 50

Keep in mind, the numbers here don’t include any filtering for what part of the city you would like to be in, whether you expect a garden, how many bedrooms and bathrooms are included, etc. It also includes a few houses for which you must provide the vacant lot. That doesn’t leave you with many places to view, and you can imagine how many other buyers are interested in the same house. While that doesn’t mean that prices go up in bidding wars (something about the German real-estate market I still can’t fathom), it does mean that good places are often sold to the first or second viewer, to people who have been looking for a while, have their financing arranged, and are ready to put down a deposit immediately.

While this is the case for the major cities, the less-populated areas of the country, or cities where the population is decreasing, will have a very different scenario. However, these probably aren’t the places where our expat readers are congregating, so I have tried to focus this article on the likely expat destinations.

If you are looking to buy property in Germany and you don’t speak German, you will need to hire a translator to help out at some point. Most realtors probably speak some English, and many are used to working with foreigners. However, when you sign the contracts you will have to do so in front of the notary, and this involves listening to the contract being read aloud. If you are not fluent in German you will want a translator to help you.
For a start on getting familiar with the German real-estate market, I would suggest learning the terms for the search box on ImmobilienScout (easily done on leo.org), and then directly contacting the realtor for any house that interests you. Realtors in Germany don’t operate like they do in North America, driving you from house to house and spending hours doing the research for you. As a foreigner, if you can find an English-speaking realtor who will help you with this process, you are in luck!

Before you buy, be sure to familiarize yourself with any terms and conditions on your mortgage, as well as calculate the realtor and notary fees. Mortgages in Germany often require a penalty payment if you pay back earlier than the agreed term, and fees for realtors and notaries are high. If you are hoping to get a return on your investment of property in Germany, you will need to calculate these extra costs into your expenses. This article in The Local from 2011 outlines these expenses in a bit more detail.

After all this work, you might be better off doing as most Germans do, and renting a place for the time you are there… even if you have to buy the kitchen.

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