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Here’s what you need to know when buying a property in Germany

If you’ve lived in Germany for a few years, and come to love the place, it’s only natural that you would eventually want to purchase a property to call home. The good news is, it’s an attainable goal for expats - although there can be obstacles.

Published: 10 March 2021 14:10 CET
Updated: 29 March 2021 11:24 CEST

Here's what you need to know when buying a property in Germany

Together with mortgage advisor, Hypofriend, we outline the steps you’ll need to follow to buy your German property, and how their powerful tech platform and English-language advice service, can make the experience a much easier process.

Recognizing that purchasing property is one of the biggest decisions we make in our lives, Hypofriend was created to give expat borrowers peace of mind as they begin their journey to home ownership.

Ready to begin your journey to home ownership in Germany? See what you can afford with Hypofriend.

Step one – Determine your budget

Before you start looking for your dream apartment, you should find out how much you can actually afford and how much money the bank would lend you for a purchase. To do this, you can use the Hypofriend Affordability Calculator. This will give you an initial estimate of what the bank is willing to lend you given your financial and personal situation.

One benefit of using Hypofriend is that once your borrowing potential has been assessed by the mortgage calculator and you have uploaded the relevant documents, you can receive a free financing certificate, which can be invaluable in putting you at the front of the queue when it comes to securing your dream home.

Be aware that there may be problems if your employment status or residency status is unusual or temporary. If this is the case, you should already be talking to an independent mortgage advisor like Hypofriend..

Step two – Start looking

After you know how much you can afford, you can start finding your dream property. It can be difficult, but it can also be a lot of fun! Either way, it pays to search thoroughly, as the German market is far from transparent.

One way of circumventing this problem is through working with the locals, whether they be friends or acquaintances. Germans can be quite motivated to discuss property prices and finding the right place to live, and there’s often a lot of pride associated with doing so. Property is a serious business, and people will generally treat your inquiries seriously and give honest answers. Don’t be afraid to ask questions about what it’s like to live in a certain area – you’ll be surprised how candid the answers can be.

Word of mouth is also a powerful thing in Germany. You’ll also be surprised how many people know of a flat or home going to the market, and who would only be too happy to put you in touch with the seller, or their makler.

Of course, it is also worth registering on the well-known real estate websites and setting up an alert that will notify you when a property of interest to you comes on the market. Having registered with Hypofriend can also support you at this stage – with their Property Radar you will receive an update once a week with listings that are in your price range.

Once you’ve found a property you love and definitely want to buy, you will have to reserve it with the makler. Here’s where the paperwork begins, and it is now time to secure your mortgage.

Step three – Convince the bank

Securing a mortgage in Germany, with foreign laws, systems and language can seem impenetrable. The temptation is to sign at the first sign of a deal, but this can lead to you being ripped off, either by unscrupulous lenders, or banks not having a full understanding of your situation.

If you can ‘bring a friend’, a more experienced borrower to watch over the process, this can avoid many pitfalls. If your workplace has individuals earmarked for such a purpose, it’s a very, very good idea to get them onboard. Whatever you do, always organize to have some ‘breathing room’ at each stage in the process before you sign anything, or proceed.

Luckily, in Germany, a lot of the convincing can be done through paperwork. Yes, you’ll be asked to provide mountains of documentation, such as financial statements, work contracts and and yes, this can be a struggle. You will be asked to provide residency permits, and sometimes banks may refuse to recognize them for one reason or another.

As infuriating as this can be, it pays to remember that patience is a virtue. If something isn’t recognized, or more documentation is required, take note of what exactly is needed and send it in. It may take time, but the banks need to do their due diligence. Remember, a paper trail is valuable for both parties.

Registering with a Hypofriend mortgage advisor can do much to smooth the way, with video and phone meetings to walk you step by step through the process, ensuring that you supply what is needed, when it is needed, and that the best mortgage for you is approved.

Once your mortgage is approved, this isn’t the end of the process. There remains a lot of steps involving the transfer of funds and the payment of various fees before you can access your new home. Again, working with Hypofriend through this process will ensure that you don’t fall prey to any hidden costs or delays.

A safer way to secure a mortgage

A mortgage calculator and advisory service, Hypofriend works with potential property owners to work out exactly what they can afford, and the best mortgage for their situation. This is achieved by using a powerful recommendation engine, and algorithm-powered mortgage experts to match borrowers with lenders. Combined with this powerful tech, Hypofriend utilises video chats with online mortgage advisors to assess your needs and find the best lender.

Best of all, Hypofriend is a free service to prospective home buyers, working with more than 750 German lenders to help more people into home ownership. At no point will you be charged for the advice you receive – and that’s an important consideration when borrowing a substantial sum of money!

Have you decided to make your home in Germany? Would you like to know what you can afford? Save time and worry and learn more about Hypofriend today.

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10 essential tips for avoiding rental scams in Germany

When it comes to settling in Germany, one of the most stressful and difficult tasks you’re likely to face is finding a place to live.

With the country in the grip of an ever-worsening housing shortage, there aren’t enough rental properties to meet the high demand – especially in big cities like Berlin, Munich and Frankfurt – and the flats that are available can often stretch even the most healthy of budgets.

With renters desperate to find affordable homes, crafty scammers have seized the chance to place fake ads on the market, often in dream locations with lower-than-average rents.

While some of these scams may be easy to spot, others can be highly sophisticated, with fraudsters setting up professional-looking websites and even allowing hopeful tenants to view their properties in person.

Recently The Local reported on a Polish couple who lost around €7,000 through a rental scam in Berlin. The scammers had sublet a beautiful Altbau apartment in the popular district of Neukölln and created an advert for it via a fake letting agent website, then arranged for people to use a key box to view the property while the real tenants were away.

Despite checking the contract over with legal experts from their local tenants’ association, nobody saw anything out of the ordinary – that is, until they tried to access the apartment and found a family already living there.

So, how do you protect your hard-earned savings and steer clear of scammers while looking for a new home?

Here are 10 important ways to protect yourself from rental scams.

1. Be alert to suspicious signs

The key to avoiding scammers in Germany is to be fully clued up on the warning signs. Was the listing for the property uploaded in the middle of the night, is the advert thin on details or written in bad German or English, and does the offer feel too good to be true?

Though it would be nice to believe there are still cheap flats to be found, finding an attractive property at an overly reasonable price is usually a red flag.

Hamburg

Modern apartments in Hamburg. Photo: picture alliance/dpa | Daniel Bockwoldt

If someone claiming to be a landlord contacts you out of the blue, that’s also your cue to run a mile. With so many people looking for housing, most letting agents and landlords will have more than people looking to rent their properties without needing to get in touch with people themselves. Anyone who does is more than likely to be a scammer.

2. Rule out landlords who say they live abroad

One of the major warning signs to look out for is a landlord who claims to be renting the property from abroad, or who says they are out of the country for other reasons, like a last-minute business trip.

That’s usually a scammer’s way of excusing the fact that they won’t be able to meet you personally or even show you the property before you rent it.

“When the country the landlord lives in appears then I would say there’s a really big chance this is a scam,” said Kuba Rudzinski, one of the victims of the Berlin-Neukölln rental fraud.

Even if the excuse seems plausible, your best bet is to ignore anyone who tries to sell you a story about living abroad and simply move on with your house hunt.

3. Do your research online

Before committing to anything, take time to do some thorough research to scope out the property, landlord and letting agent.

Running the pictures and text used in apartment listings through a search engine like Google will help you quickly identify stock photos and text stolen from other listings. For pictures, this is known as a reverse image search.

A laptop

Photo by 2H Media on Unsplash

It’s also worth checking that any websites you’re sent to are fully functional and not copies of other letting agent sites, and that any email addresses match the website domain.

4. Visit the property and ask around

Never agree to rent a property without seeing it in person first. Arrange a viewing and take the opportunity to ask questions about the property and the neighbourhood.

Kuba also recommends speaking with the neighbours in the building to check if the property is genuinely being rented.

“Go to the place before and ask the neighbours, is this flat really for rent? Because these people generally know,” he said. “You’ll need to convince yourself to do it of course, but just ask in the building, ask on the floor where the flat is.”

5. Don’t transfer the full deposit in advance

Advance payments for anything, whether it’s furniture, a deposit or getting a chance to view the property, should be considered a major red flag.

Under German law, you are usually only expected to pay the deposit by the start of the agreed rental contract – and certainly not several months in advance.

Euro notes lie next to some house keys on a table.

Euro notes lie next to some house keys on a table. Photo: picture alliance/dpa/dpa-tmn | Andrea Warnecke

You are also legally entitled to pay your three months’ deposit in three instalments on top of your first three months’ rent after moving in, so definitely be cautious of landlords that place pressure on you to transfer a large lump sum.

If you’re really concerned, look into alternatives for paying your deposit, such as Kautionversicherung (deposit insurance) or a Mietkautionssparbuch, where you open a bank account and pledge the amount to the landlord, rather than transferring the money directly.

6. Insist on meeting the landlord or letting agent in person

If a landlord or letting agent refuses to meet you in person or insists on conducting all communication online, they’re probably not who they say they are.

Insist on meeting face-to-face to verify their identity and ensure they have a legitimate connection to the property.

7. Avoid sending documents straight away

Not all rental scams are about getting money from you directly: many scammers are simply after your personal details for the purposes of identity theft.

Be wary of providing personal documents or sensitive information before you’ve verified the legitimacy of the rental agreement, especially when it comes to things like passport scans or other forms of ID.

8. Seek legal advice from experts

If you’re unsure about any aspect of the rental agreement or if something seems suspicious, seek advice from legal experts or tenants’ associations.

However, be aware that this isn’t always a cast-iron guarantee that a tenancy is legitmate. Over the past few years, fraudsters have become increasingly sophisticated, even down to producing water-tight rental contracts for would-be tenants.

An estate agent hands over keys to an apartment. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

According to civil lawyer Emilia Tintelnot, becoming a member of a tenants’ association can be a good way to get affordable legal advice, and it can also be helpful to set up legal insurance to ensure you can access help when you need it without having to pay lawyers’ fees up front.

9. Be wary of stereotypes

Avoid making assumptions based on stereotypes or preconceived notions about someone’s gender or nationality, as this may cause you to overlook things you might otherwise see as warning signs.

In Kuba’s case, the fact that the fraudsters were German made them appear more legitimate in his eyes, as Polish people tend to see Germans as law-abiding and trustworthy.

Be aware that scammers can come from any cultural background and may use a variety of tactics to deceive unsuspecting renters.

10. Keep an extensive paper trail

Document all communication, agreements, and transactions related to the rental process, including phone numbers and any bank details provided.

According to the Berlin police, this type of evidence can be crucial for an investigation if you do suspect a scammer.

While evidence can differ across cases, “pictures, contact details used by the perpetrators, original documents, bank details with payment receipts” are particularly helpful for investigators, and could help the police stop the scammers for good.

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