Frequently asked questions and answers about a real estate purchase agreement
What steps follow the signing of a real estate sales contract and what is the time schedule?
Within a few days after notarization, the notary will arrange the following steps:
The notary provides the parties with a copy of the purchase contract. Usually in advance by email and afterwards also by post.
The notary applies for the registration of a notice of conveyance in favor of the buyer in the land register.
The notary applies to the municipality for a negative certificate as confirmation that the municipality will not make use of its pre-emptive right.
The notary public requests from the financing bank of the seller a deletion approval of the encumbrances to be redeemed in the sale, which, if necessary, will be issued by the financing bank under trust conditions.
The notary public arranges the land charge order for the financing bank of the Purchaser at the land registry office, unless the purchase price is financed 100% from the Purchaser’s own funds.
The notary sends a copy of the property purchase agreement to the tax office so that the tax office can invoice the payer (usually the buyer) for the land transfer tax.
The municipal expert committee receives a copy of the real estate purchase agreement.
Upon presentation of all due date requirements, the notary will arrange the following steps:
Request for payment of the purchase price
Application for transfer of ownership around land register (conveyance) as soon as the purchase price has been paid and the negative certificate of the tax office (proof of payment of land transfer tax) has been issued.
The request of the responsible tax office for payment of the land transfer tax (notice of land transfer tax) is usually issued four to eight weeks after conclusion of the real estate purchase agreement. The real estate transfer tax is payable one month after receipt of the notice. After payment of the land purchase tax, the tax office issues the certifying notary public a so-called clearance certificate, which the notary public needs to submit to the land registry office to apply for the transfer of ownership in the land register.
Usually within 7 to 10 days after notarization:
Registration of the priority notice of conveyance in the land register
Submission of all applications according to the purchase contract
Usually 14 days to 2 months:
Receipt of the cancellation approval(s) from the financing bank(s) of the seller
Registration of the land charge for the financing bank of the buyer in the land register
Receipt of the negative certificate of the church
Why does my spouse have to sign the apartment purchase agreement even though only I want to become the owner?
If you are married and with the purchase of your real estate you dispose of a large part (approx. 90%) of your total assets, the consent of your spouse is required for this, according to § 1365 BGB, regardless of the ownership situation (regardless of whether you become sole owner of the real estate). The same applies to the sale of real estate.
Do I have to attend the notarization meeting in person or can I be represented?
There are the following alternatives:
Representation by an authorized representative with notarial power of attorney
A person of your trust will receive a notarial power of attorney from you to sign the purchase contract on your behalf. The purchase contract becomes effective upon signature and the responsible notary’s office can immediately begin with the processing of the purchase contract.
Representation by a non-authorized representative
An employee of the notary public, the real estate agent involved in the sale or even an uninvolved third party can sign the purchase contract for you without power of attorney, provided that she gives a corresponding order, and you subsequently approve the purchase contract at a notary public of your choice. The purchase contract will only become effective upon receipt of the declaration of approval signed by you at the notary public who notarized the purchase contract. Only then can the notarizing notary’s office begin processing the purchase contract. For the other party to the purchase contract, this possibility of representation represents the risk that the purchase contract may still fail until your approval.
Representation by an authorized representative with verbal power of attorney
A person of your trust receives a verbal power of attorney from you and signs the purchase contract in your name and you confirm the power of attorney afterwards at a notary of your choice. The notary public can immediately begin with the processing of the purchase contract. This representation option is more binding for the other party to the purchase contract, as the person with verbal power of attorney enters into a liability obligation upon signing.
Why is the content of the land register reproduced one-to-one under the section ‘Requirements’ in the purchase agreement, even if, for example, the land register contains typing errors or legal burdens and restrictions that are not assumed by me?
Under ‘Prerequisites’ the purchase contract does not show the desired or future land register situation, but the actual situation. If the actual situation contains errors, these can be corrected on separate request.
What is meant in the purchase contract by the reference ‘special rights of use are agreed’ in the land register object?
A special right of use (SNR) is, according to condominium ownership law, the authority to use certain parts of the common property alone, excluding the joint use by the other condominium owners. The note ‘special rights of use are agreed’ thus indicates that special rights of use are granted to individual co-owners for parts of the common property.
What is meant in the purchase contract by the reference ‘Because of the object and content of the special property and the special rights of use, reference is made to the approvals of XX.XX.XXXX and XX.XX.XXXX of the notary John Smith’?
In this case, the so-called ‘approval’ means the declaration of division together with a change/addition. As the buyer of an apartment, one always assumes all rights and obligations resulting from a declaration of division and its amendments/supplements, provided that these are recorded in the land register.
What is meant by the fact that buyers purchase ‘ever to the ideal half’?
Once two or more people buy an apartment together, it cannot simply be divided into two or more specific parts so that everyone can buy a specific part of the apartment. To that extent one acquires to the ideal half and thus in each case 50%.
Which reasons speak for it to divide the total purchase price proven in the sales contract in the long run into a building purchase price portion, an inventory purchase price portion and a property purchase price portion.
purchase price of the property less the equivalent value of any inventory items (e.g. fitted kitchen, awning or furniture) as well as any maintenance reserve that may have been sold along with the property. If the inventory is shown separately, the equivalent value of the amount shown for the inventory can be saved on the land transfer tax. Attention: A realistic amount should be set, as the tax office may question this and, if necessary, ask for proof.
What is a notary escrow account and is it required by me?
A notary escrow account is a special form of escrow account. The notary manages this account in his own name in trust for the account of the payee and thus for the account of a third party. The use of a notarial escrow account for the payment of the purchase price requires that a special security interest exists for the parties. This is the case, for example, if the transfer of the property is to take place before the purchase price could be requested from the notary. The payment can then be made temporarily to a notary public escrow account, whereby the Seller has the security that the purchase price is available and the Buyer has the security that the purchase price will only be transferred to the Seller’s power of disposal as soon as all due date requirements for the payment of the purchase price have been met. A notary escrow account is subject to a fee, which is why it is waived unless there is a compelling necessity.
What is meant by a submission to execution?
A ‘submission to execution’ means that the seller can immediately enforce execution against the buyer of the property and demand payment of the purchase price if the buyer does not pay the purchase price on time. Thus it is to be avoided that the salesman does not have itself with not punctual payment of the purchase price by the buyer first a title with court to sue must. Such a regulation is usual in real estate sales contracts, why before signing a sales contract it is important that the purchase price financing is finally secured.
What is meant by development contributions?
A ‘submission to execution’ means that the seller can immediately enforce execution against the buyer of the property and demand payment of the purchase price if the buyer does not pay the purchase price on time. Thus it is to be avoided that the salesman is not in case of not in time payment of the purchase price by the one development contribution is a local tax, with which the municipality finances the development of a property. For such payment obligations, there is always also a liability in rem, i.e. liability by the respective property. If a buyer acquires a property for which development contributions are still outstanding, the payment obligation of the land plot is also acquired. It can be agreed that this remains with the seller in the internal relationship between buyer and seller. However, if the seller is unable to pay as soon as the payment is due, the buyer or the person who is registered as owner in the land register at the time the costs are levied, has to bear the development costs due to the liability in rem.
What is meant by construction loads?
A building charge is a public law obligation of a land owner to a municipality to do, refrain from doing or tolerate certain things concerning the land. In most German states there are separate lists of building encumbrances, which can be used to find out whether or not there are any registrations. In some German states there are no lists of building encumbrances, since in these cases all building encumbrances are not entered in a separate list of building encumbrances, but in the land register.
What is meant when the purchase contract refers to the transfer of possession, benefits and burdens or the change of possession, benefits and burdens or the transfer of possession, benefits and burdens?
This date is the day from which the benefit of the property (e.g. rental income) and the encumbrances of the property (e.g. clearing and gritting obligation) are transferred to the buyer.