Our new flat: 3. The Paperwork

I’m catching up on some blogging this week.  Yesterday I reported on how we arranged our mortgage.  Today, I take a look at the paperwork involved.

The decision to buy the flat had been relatively easy, and discussions with the bank had also turned out to be easier than I had expected.  Now we got down to the nitty-gritty of signing the paperwork.

Our first appointment was with the estate agent.  Here we had to sign a pre-contract agreement to show our intention to buy the flat – and to pay his fee of 5% + VAT.  If we turned back now it was going to cost us 1,000EUR.

Our second appointment was with the Notar (a form of solicitor who specialises in such things) to sign the purchase contract.  Here we met the seller for the first time.

The contract was 18 pages long, and the Notar read it all out to us and explained the more tricky to understand paragraphs.  I am particularly proud of the following paragraph:

“Herr Tappenden is britischer Staatsangehöriger.  Er ist der deutschen Sprache hinreichend mächtig, um dieser Verhandlung folgen zu können, wovorn sich der Notar im Gespräch überzeugt hat.  Auf Vorlage einer Übersetzung oder Hinzuziehung eines Dolmetchers wird verzichtet.”

I took that as a compliment!

Anyway, even though that was probably the biggest step in our life for a long time, it was all actually rather easy at this point.  We just needed to get our part of the money together (Eigenkapital, similar to the deposit in the UK) and sign a formal contract with the bank.

And then, we started getting lots of post.

Every now and then we got a letter from the Notar, telling us what he had done and including his bill for the work.  This would cause the town of Oberursel to send us a bill as well.  This is all to do with the Grundbuch, something like a land registry office.  First they put our intention to buy the flat on the books, stopping it being sold to anyone else.  Eventually the removed the names of the previous owners and entered ours as permament new owners.  And every step meant two letters and two bills.

But it didn’t stop there.  The Finanzamt sent us a few bills to pay as well – for Grunderwerbsteuer. The best thing I can think of to translate it as is “stamp duty”.  It is a tax based on the price of the property being purchased.

And then came the biggest envelope of all – from the bank.  It contained our mortgage documents and a list of things that we had to provide, sign, answer etc. before they would pay the seller.  Luckily we had about a month to get all of these together, as the list had 17 items on it!

One of the more tricky ones was something called a Zustellungsvollmacht – I needed someone who would legally be allowed to receive post from the bank from me in case I decided to stop the repayments and return the UK.  In this case the bank would want to repossess the flat, but would not be able to sell it until they had sent me notice of the sale.  Since they would not be able to forcefully deliver the documents to me in the UK, I had to nominate a German national who they could deliver them to instead and who would be responsible for informing me.

By the end of June we had managed to get all the money where it needed to be and all the documents that the bank wanted to have.

For a brief moment my current account was credited with the full value of the mortgage and had the entire purchase on it.  A few minutes later the bank transferred it all to the seller, and the transaction was complete.

Our new flat: 2. The Purchase

I’m catching up on some blogging this week.  Yesterday I reported on our decision to buy a new flat.  Today, a look at our how we actually went ahead to buy it.

Convincing a bank to lend you money for a mortgage is basically a matter of convincing the bank that (a) the property that you want to buy is worth that much – should they want to repossess it at some point, and (b) that you can afford the repayments.

If you are in a steady job, that (b) is not really going to be a problem.  You show the bank your last wage slip and answer some questions about your lifestyle, and they take their decision.

Being self-employed makes it all rather more difficult.  I went to the bank armed with all sorts of facts and figures about my business, our insurance contracts, and any other expenses that we regularly have.  Actually, I’d had a lot of the figures worked out for a long time and and just needed to update them using our accounting software.  If the bank were going to ask me to guess something, such as how much we spend on food each month, then they were going to get an exact answer.

Instead of going to my usual branch, I had to go to a different office that dealt specifically with self-employed customers.  I am pleased to be able to write that I covered almost everything that they wanted to know, and only three items remained.  One of this was something called a Betriebswirtschaftliche Auswertung – basically this is a financial statement about my company that is produced by my tax advisor.  I rang him straight away (Friday afternoon) and by Monday morning I had everything I needed and forwarded it to the bank.  One of the other items was a SCHUFA check.  This is to make sure that we didn’t have any bad debts.  SCHUFA is not something that should be under-estimated.  If you get a bad entry on their database, it can be difficult to get credit with a bank or financing company.

The bank did not take long to reach a decision – on Monday afternoon I was on my way to pick our daughter up from Kindergarten, when my mobile rang to tell me that we could go ahead with the purchase.

I called the estate agent right away, and he set the wheels in motion…

Please click on ACCEPT to give us permission to set cookies [more information]

This website uses cookies to give you the best browsing experience possible. Cookies are small text files that are stored by the web browser on your computer. Most of the cookies that we use are so-called “Session cookies”. These are automatically deleted after your visit. The cookies do not damage your computer system or contain viruses. Please read our privacy information page for more details or to revoke permission.