Buy Your First Property: 5 Simple Steps to Property Ownership
Are you planning to buy your first property? Here you will find everything important in 5 steps – from budget planning to key handover. The purchase of a property is a complex process that requires careful planning and preparation. From budget planning to property search to financing and the notary appointment – each step must be well thought out and executed. Thorough preparation helps you make informed decisions.
With the right support and the right information, you can successfully navigate the path to your dream property.
The most important points at a glance
The process of buying a house involves several essential steps. Here are the key points:
Budget planningCarefully compare your income and expenses.
Property searchVisit various houses and apartments to find a suitable property.
FinancingA pre-financing commitment is essential to confirm your payment ability.
Notary appointmentThis is where the purchase contract is signed and notarized.
Payment of the purchase priceAfter notarization, the payment of the purchase price takes place. Finally, you will receive the keys to your new property.
The purchase of real estate should be carefully planned and executed to avoid potential mistakes. The right preparation helps you successfully navigate the path to your dream apartment in small steps.
Budget planning for the first property
Thorough budget planning is the first and most important step when purchasing real estate. It helps you realistically assess your financial options and avoid financial bottlenecks. Start by comparing your income and expenses and establishing a budget framework.
It is necessary to address the financial aspects of the purchase early on to create a solid foundation for decision-making.
Determine equity
When purchasing a property, equity plays a crucial role. It should be at least 10-20% of the purchase price. The more equity you can contribute, the better your chances are for favorable financing. Higher equity leads to better loan conditions and lower interest costs.
Additionally, you should consider that equity should also be used to cover the ancillary purchase costs. These include:
Property transfer tax
Notary fees
Land registry fees
Possible brokerage fees
A careful calculation of equity is essential to ensure financial security.
Calculate loan installment
Calculating the loan installment is another important step in budget planning. First, record your income and expenses in a household ledger to determine your financial surplus. Also, plan for a financial buffer for unexpected expenses. It is recommended to spend a maximum of 30% of your income on housing costs.
Remember that the loan installment must be sustainable in the long term to ensure your financial stability.
Set maximum purchase price
To determine the maximum purchase price of your dream property, mortgage calculators can be a great help. These tools take into account both your equity and the monthly loan payment, allowing for an accurate calculation of the maximum purchase price. It is crucial that the purchase price fits within your budget to avoid financial strain.
Equity and monthly loan payments play a significant role in determining the maximum purchase price. A realistic assessment of these factors helps you find a suitable property that aligns with your financial capabilities.
Start Property Search
Once you have established your budget, you can begin your property search. Real estate portals are essential tools in this regard and offer numerous services for presenting properties.
You can find your dream property through various channels: online, via print advertisements, offers from banks, or through a real estate agent. The next step after initiating the property search is to schedule viewings for interesting properties.
Important Factors in Property Search
The location of a property is one of the most critical factors in the selection process. Both micro and macro location significantly influence the value and attractiveness of the property. It is advisable to gather information on current market prices for comparable properties to assess the appropriateness of the purchase price.
Other important factors include infrastructure, proximity to public transport, shopping facilities, and schools. These aspects significantly contribute to the quality of life and long-term value appreciation of the property.
Scheduling Viewings
It is advisable to view several houses before making a purchase decision. Once you have found a promising property, you should quickly schedule a viewing appointment. This allows you to compare different options and make the best choice.
Preparation for the Viewing
Before the viewing, it is helpful to take a walk around the neighborhood to familiarize yourself with the location of the property. The best time for a viewing is during daylight, as this allows you to better identify any potential defects. A thorough review of relevant documents before the viewing is also necessary.
Make a note of questions regarding any uncertainties that you can discuss later during the viewing. Important aspects during a house viewing include the atmosphere, room layout, fittings, and any potential damages. An appraiser can assist you in evaluating the condition of the property.
Also, pay attention to technical details such as the heating and drinking water systems, windows and doors, as well as the façade. These factors play a crucial role in the long-term preservation and maintenance of the property.
Financing the Property
A higher equity leads to lower interest and credit costs. In the case of 110% financing, the additional purchase costs are also financed, which is only advisable with a high rental yield. The financing expenses consist of interest and repayment. It is advisable to compare the offers of different banks to obtain the best conditions.
A preliminary financing commitment is a written confirmation of financing up to a certain maximum amount and should definitely be available before the notary appointment.
Preliminary financing commitment received
A preliminary financing commitment is crucial to ensure your payment capability and to avoid financial problems when purchasing real estate. This commitment serves as a formal confirmation of credit availability up to a specified maximum amount.
Before a bank issues such a commitment, it typically requires the following documents:
a land register excerpt
income and asset proofs
personal documents such as identification documents and the rental agreement
a Schufa report
information about existing liabilities
These documents help the bank assess your financial situation and check your creditworthiness.
With a preliminary financing commitment, you can be assured that your financing is secured, giving you a decisive advantage in the negotiation process. It signals to the seller your seriousness and your ability to pay the purchase price.
Concluding the loan agreement
Before you sign the purchase agreement for the property, you should ensure that the loan agreement has already been signed. This means that you and the bank have agreed on the loan conditions. For the credit check, you must provide the bank with various documents that demonstrate your financial situation.
If you are missing certain documents, specialists on-site can assist with obtaining them for a fee. After signing the loan agreement, you can finalize the purchase agreement and prepare for the notary appointment.
Purchase Agreement and Notary Appointment
The notary appointment is a crucial step in the purchasing process. The registration of the transfer in the land register secures the transfer of ownership for the buyer to protect their interests. After the signing of the purchase agreement, the notary takes care of the registration and informs the tax office about the change of ownership.
Reviewing the Purchase Agreement Draft
The buyer should receive the draft of the purchase agreement at least 14 days before the notary appointment. This draft is reviewed by both parties, either in a personal meeting or via email. It is important to carefully examine all the conditions included in the purchase agreement and, if necessary, to formulate changes.
Before the purchase, important documents such as lists of contaminated sites and land register extracts should be made available for review. These documents help identify potential risks.
Notary Appointment and Certification
The notary appointment follows a regularly established procedure according to the Certification Act. During the appointment, the notary reads the entire purchase agreement aloud to ensure that all parties understand the contract contents. The notary answers questions and clarifies any uncertainties.
After the certification of the purchase agreement, the notary is responsible for registering the new owner in the land register. The certification seals the purchase, and the buyer must then pay the purchase price. The notary oversees the entire sales process and ensures that all relevant information is verified.
There may be follow-up questions or changes during the signing of the contract. These will be discussed before the certification and noted by hand in the margins of the document.
Payment and Handover of the Property
The sale of a property concludes with the payment of the purchase price. After the payment of the purchase price, the notary informs the tax office about the change of ownership.
The handover of the keys takes place after successful payment and the change in the land register.
Paying the Purchase Price and Additional Costs
The request for payment of the purchase price occurs after the signing of the purchase agreement by the notary. It is important that you pay the purchase price on time to avoid jeopardizing the transfer of ownership. After the payment of the purchase price, additional costs such as property transfer tax and broker fees may arise.
The buyer becomes the owner of the property when all conditions stipulated in the contract are fulfilled. Therefore, careful planning and calculation of the additional costs are essential to avoid financial surprises.
Key handover and move-in
The key handover usually takes place after the payment of the purchase price and the change in the land register. The physical handover of the property can occur after the change in the land register. The keys are typically handed over by the broker and the seller.
Before the key handover, a final inspection of the property should be conducted. A checklist for issues such as defects must be documented during the key handover and recorded in the protocol to avoid later conflicts.
How we can help
With us, you will find not only top-quality properties directly from the developer but also save on the broker's fee. Furthermore, we will guide you through the entire process described in this article.
Please feel free to contact us for a non-binding consultation. We support you at every step of your project.
Our experts are at your side to ensure a smooth process when purchasing real estate, from the first viewing to the key handover. We assist you in reviewing the purchase contract and prepare you for the notary appointment so that you can enter the purchasing process well-informed and confidently.
Whether you have questions about budget planning, choosing the right property, or additional costs – we are here for you. Our mission is to make your dream of owning your first property a reality, and we are committed to ensuring that your real estate purchase is a complete success.