Securing a bank loan with a German bank for your house purchase will likely take longer than what you are used to in the United States. A two week approval in America isn’t uncommon, but the vetting process in Germany (as of December 2023) can take as much as six weeks and sometimes longer. We have outlined the steps to approval so you can understand how and why the process takes so long.
1. Bank Appointment
Make an appointment with the bank. This is your preliminary request for financing (we can help you with this). Here are some of the key questions:
- Do I want to bring in equity capital?
- Do I have to contribute equity, if so, how much can I contribute (the exact amount depends on the purchase price of the property)?
- Will the house be used privately in the future or rented out?
- How high can/may my monthly loan instalment be?
- How long should the interest be fixed?
2. Property Search
Search for a suitable property matching your budget. You should notice this step comes after your bank appointment. Since banking standards are different in Germany, you need to understand what a bank will finance based on your income and assets. Here are some handy sites that might be helpful:
Mitchell-Investment.com
FindItGuide.com
Immobilienscout24.de
Immowelt.de
Ebaykleinanzeigen.de
Immonet.de
Direct broker sites in the area you are interested in. You can search in your browser by “AREA” + the word “Immobilien”.
3. Property Viewing
Schedule an appointment with the realtor or private seller and if possible, bring a written pre-approval from the bank with you to the showing. Most realtors ask that you call them directly if they are the listing agent. This is a little different than how it works in America, where you work with a broker and they contact the listing agent for you.
4. Purchase Offer
Make a purchase offer and request the necessary documents. You can use our form by requesting it below.
5. Bank Appointment 2
Assuming your offer was accepted, the next step is a bank appointment. In this step, valuation of the house by the bank will take place and discussion of financing for the appropriate house for you.
6. Broker requests Notary Appointment
The broker makes appointment with notary public. If there is no broker/realtor involved, usually the seller or the buyer sets up the appointment. (The buyer will get to choose which notary they would like to use. If you are not fluent in English, you also need to get a certified translator involved or make sure the notary is allowed to record the contract in both languages (German and English).
(Recommended Notary’s: Dr. Markus Stuppi, Landstuhl (only german – translator needed/required), Dr. Bernd Gilcher, Lauterecken/Wolfstein (is allowed to record in both languages)
7. Notary Appointment
This appointment is binding. Both the purchase contract and land charge will be signed on the same date.
8. Bank Appointment
At this appointment, the signature of loan contract will take place at the bank.
9. Purchase Price Due
This is usually the day the keys get handed over and the buyer becomes economic owner of the property (i.e. may renovate the house, rent it out, move in, receive rent/ deposit) The buyer is also responsible for all costs concerning the house such as utilities (water, electric, gas, property taxes, building insurance, etc.) additional costs as well as renovation costs etc.) 4-6 weeks
10. Land Registry
As the legal owner, your name gets entered into the “Grundbuch” but it could take as much as 3-12 months from purchase price payment.
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