Step by Step to Your First Property—Here's What You Need to Know

First, you need to think things through carefully and make some fundamental decisions. What monthly payments are you willing to make? What additional costs might you face when purchasing the property? What additional investments in the property would you like to make? How much equity do you have? What one-time and ongoing costs will you face?

One-time costs include not only the purchase price itself but also fees for the notary, real estate transfer tax, and, if applicable, real estate agents and appraisers; any renovations or other investments should also be factored in here. Recurring costs to consider include monthly loan payments, operating expenses, as well as insurance premiums such as building insurance, natural disaster insurance, and the annual property tax.

Check whether your home savings or Riester pension plans offer attractive terms for a loan; include any available equity in your calculations, as well as potential special repayment options and interest rates, along with tax breaks and potential subsidies. These include the employee savings allowance, KfW subsidies, home ownership assistance, the children’s home-building allowance, as well as the housing construction premium, capital-forming benefits, and the residential Riester plan. Many of these subsidies are specifically aimed at young families; they are designed to help as many people as possible take the important step toward purchasing their first home.

You should also be aware of tax benefits such as declining-balance depreciation and factor them into your budget. Some consumer advice centers offer independent, free financing advice and can help you review your strategy before you take it to your bank.

Once you’ve developed a solid financing strategy, your bank can then assist you through a budget consultation and assess whether the loan amount and agreed-upon repayment installments are manageable. After a successful credit check with SCHUFA, you’ll receive a financing commitment from your bank. Most sellers absolutely require the financing commitment or proof of equity to proceed with the sale or purchase, as this verifies your solvency.

The Right Property

It makes sense to first explore your financing options and then search for the right property. This way, you can start looking for the right property right away while taking your individual needs into account.

Now it’s a matter of what you’re looking for. City or countryside? Investment property, condominium, or single-family home? A renovated older building or an energy-efficient new construction? What’s important to you in terms of infrastructure, location, and surroundings? Is there a daycare center, a supermarket, public transportation, and good access to the highway and the surrounding area? Does your dream property offer modern electric vehicle charging infrastructure, thermal insulation, or energy-efficient systems?

You’ll find important information about your desired property in the building specifications. You can also obtain information such as the exact floor area calculation, the year of construction, detailed floor plans, and a current energy performance certificate from your developer or seller.

Whether you purchase your property directly from the developer or through a real estate agent, the Real Estate Agent and Developer Regulation applies. Here, you specifically agree on which payments you, as the buyer, can make and at what intervals. The regulation is primarily intended to protect the buyer, for example, when a condominium is still under construction. It stipulates that payments made by the buyer to the developer may only be used for that specific property and are also based on the progress of construction.

At the Notary’s Office

No later than two weeks before the notary appointment, you will receive a draft of the purchase agreement from the notary. This gives you ample time to review all the details carefully once more. At the same time, the notary will handle the creation of a land charge. This means the notary will apply to the land registry office for the necessary entry. The land registry, an official register, records who owns a property, the amount of any encumbrances on it, and any other rights or obligations that exist. It is important to carefully review the land registry entry. Any debts (mortgages) are recorded here, as are any rights held by third parties (such as a right of residence or right of way), known as easements.

Once the land registry entry has been recorded, the purchase agreement has been drafted, and the financing has been finalized, it’s finally time to go to the notary. As part of the notarial certification, the purchase agreement is signed by all parties to the contract. You will handle the registration of the mortgage together with the notary following the certification. When visiting the notary, you will need a valid form of identification, such as an ID card or a passport.

When taking possession of your first property, you should be present in person and have the handover documented. Well, at last, you’re holding the key in your hand. Before you pay the full purchase price, be sure to wait for the notary’s notice of the purchase price due date. This is a prerequisite for ensuring that the purchase price payment can be made as planned. You can then begin making your monthly mortgage payments once the full purchase price has been paid.

Now is also the right time to review your insurance policies and contracts again and, if necessary, switch to more affordable providers. Don’t forget to set aside funds for maintenance and unforeseen expenses.

If you’ve purchased a condominium, familiarize yourself with the condominium owners’ association (WEG) as soon as possible; you can also request minutes from past meetings to get an overview of current issues in the building. Now nothing stands in the way of your happiness in your own home.