Process of Selling a Property in Germany: Explained

Selling a property anywhere can be an intimidating task, let alone in a foreign country. However, you’re not alone, and property sales are conducted every day in Germany, and the process can be smooth and trouble-free with some research and support.

A number of essential decisions need to be made before and during selling property in Germany. The seller of any German property needs to educate themselves about the timeframe within which they plan to sell, the price they want, the fees and taxes payable, the documentation required, and, lastly, if a professional real estate service is used or they sell privately instead.

Selling a home might sound overwhelming, but, importantly, it doesn’t need to be, and here you will find everything you need to know about selling your German apartment or house. These tips will guide you through all important steps and help to avoid making expensive mistakes when dealing with real estate in Germany.

To protect your house or apartment in Germany, sign up for home insurance; it costs just 2 EUR per month and saves you thousands.

Are you planning to rent out your property? Read this post on how to be a landlord in Germany.

Selling an apartment or house in Germany

For most Germans, buying a property is a life-long dream and a life-long commitment. It isn’t typical for them to buy and sell time and again. The culture of flipping property isn’t common here, and tax legislation makes it less worthwhile.

The financial decision to sell a property depends on three major factors; how long you have lived in it and how much it is worth. In 2022, property prices in Germany are on the rise in almost every city; in some cities, there have been increases of over 50% in property sale prices compared to four years ago.

Read more about property prices in Germany in the article about current house prices.

It’s clear to everyone that selling now can make a lot of financial sense if the goal is to return overseas or downsize, so if the decisions make it viable, read on.

Most sellers use a real estate service (Immobilienmakler) to manage and guide them through the process. It is costly (normally 3.57% of the property sale price, a fee that the buyer also pays for a total of 7.14% real estate commission), but it does take away a lot of stress and responsibility (for some tasks).

The real estate agent takes on the responsibility for selling the property, and all that entails, including the following:

  • Document preparation
  • Property advertising
  • Create an exposé for the property with photos,
  • Managing inspections for prospective buyers
  • Check the creditworthiness of potential buyers
  • Negotiating a sale price on behalf of the sellers
  • Once an offer has been accepted by the seller, prepare the sale contract in collaboration with the notary office
  • Being present at notary office appointments

You can use our top recommended real estate agency in Germany – McMakler to sell your property.

Preparation for selling a real estate

  1. Collect information about the regional real estate market and determine the value of the property.
  2. Obtain all documents for the sale, for example, copies of the floor plan and site plan, extract from the land register, energy certificate, and living space and plot calculations.
  3. Prepare the property for visitors.
  4. Allow plenty of time (at least 30 days), especially for dealing with the authorities, communicating with potential buyers and agents.

Determine the selling price

The most important step in selling your property in Germany is to get an adequate value assessment to determine the selling price. An agency could also help you with it.

The selling price of an apartment depends on various factors, hence, it should be defined by the professional and not on the basis of the seller’s desired price. As an owner, you should have a real estate broker carry out a well-founded valuation and determine the market value and the selling price.

Some properties can be inundated with inquiries from potential buyers (literally hundreds a day), so having a real estate agent take over the responsibility for filtering who to show the property saves the seller a lot of time.

Sellers will need the following documents to hand over to the buyer, real estate agent, and the notary office to complete the sale:

  • Floor plan (Grundriss)
  • Extract of the land registry and mortgage documents (Grundbuchauszug and Grundschuld)
  • Energy certificate (Energieausweis)
  • Declaration of division of an apartment within its building (Teilungserklärung)
  • The protocols from the 3 most recent general owners’ meetings (Protokolle der Eigentümerversammlung)
  • Building construction plan and description (Bautechnische Unterlagen und  Baubeschreibung)
  • Building permit (Baugenehmigung )
  • Cadastral map (Flurkarte)

The following documents will also assist in the sale of your property:

  • Detailed property plans (blueprint, site plan, etc)
  • Overview of ancillary costs (Nebenkosten)
  • List of the last renovation work and modernisation work 
  • Insurance papers
  • Wastewater planning and land charges
  • Pictures of the property

Why you need a notary to sell an apartment or house in Germany?

All real estate contracts must be notarized by an official notary in Germany. Usually, you only need a notary after finding a prospective buyer and agreeing on all terms. After the contract was finalized, the notary will verify it in your and the buyer’s presence. Both parties will need to sign this selling agreement.

Therefore, for the notarization of the sale, the visit to the notary is mandatory. However, the sale isn’t quite completed yet. The notary will now organize the entry in the land register.

Consequently, selling property in Germany is a long process; sales with a fast settlement are not the norm. The time from deciding to sell in the first place to actually selling the property can be anywhere from 3 to 6 months; for example, an apartment or a townhouse in the country will have less interest than an apartment or house in a big city.

In some cases, it might be even longer to sell, like if a house requires modernization or renovation, as there are often fewer potential buyers and more negotiating on the purchase price.

To protect your house or apartment in Germany, sign up for home insurance; it costs just 2 EUR per month and saves you thousands.

Selling property with a broker in Germany

Besides selling property on your own, you can do it with the help of professionals. Real estate companies can assist you will all processes of selling a house, apartment, or land in Germany.

Currently, McMakler is one of the largest players in the market, with over 400 local brokers in more than 100 German and Austrian cities, with the main office in Berlin.

A broker will walk you through the whole process, from assessing to selling your home. McMakler is our preferred real estate agency in Germany. Read reviews here.

Some areas where real state agencies, such as McMakler can help you:

  • Apartments for sale
  • Houses for sale
  • Commercial real estate
  • Investment properties
  • Luxury real estate
  • Land
  • New building sales
  • Apartments for rent
  • Houses for rent

Some of the services that brokers provide include:

  1. Personal consultation
  2. Free market value assessment
  3. Individual marketing concept for selling process through detailed target group analysis
  4. Documents preparation
  5. Communication with interested parties and potential buyers
  6. Professional preparation of the sales contract
  7. Continuous support throughout the process

Selling a property privately vs with a broker

Selling a property as a private deal (on your own) has its pros and cons:

ProsCons
It’s cheaper – you don’t pay a broker’s fee.Real estate agents know the market and real estate prices, so you will get a better evaluation, thus, the selling price.
The sometimes time-consuming search for real estate agents is no longer necessary.They have good negotiating skills that help you achieve a higher selling price.
An advertisement can be created quickly and easily, even without prior knowledge.Agents have great marketing expertise, which helps you to advertise on various channels, hence, have more potential buyers.
The entire sales process is transparent, and you act independently.Selling an apartment/house with a broker can be significantly faster than selling it privately.
The real estate agent also supports you in all legal matters. Which, let’s be honest, can be pretty complex in Germany.

Save time searching for the right real estate agent, check out McMakler.

Places for selling property in Germany

Since most property sales are conducted through the use of a real estate agent, they provide the advertising service, too. There are a number of large and popular online portals agents and private sellers use to advertise the property, but these are some of the most popular:

Most real estate agencies have their own websites they advertise on, but most advertisements are duplicated onto these platforms.

If you choose to sell without an agency service, you can still advertise on those mentioned above big online platforms. Still, many sellers will also use services like McMakler, a company focussed on private property sales, and the ever-popular ebay-kleinanzeigen.de, a platform that functions much like craigslist or gumtree.

Can you sell a house with a mortgage in Germany?

The short answer is, yes, you can sell a property in Germany with a mortgage. The mortgage (Grundschuld) continues to exist after the loan has been paid off; the bank continues to hold the deed to the property (allowing the property owners to keep a line of credit open if necessary).

The mortgage can be terminated initially with a request to the bank, then the local notary office initiates the next step with the land registry for the mortgage termination, to finally transfer the property deed to the owner.

The mortgage termination cost is 0.2% of the mortgage value. Most owners prefer to buy a property without any mortgage, but the mortgage can be transferred to the buyer, with or without any outstanding loan on the property.

NOTE: In Germany, there are two types of mortgage facilities; Grundschuld and Hypothek. A Grundschuld is a typical mortgage whereby a loan is secured against the property, and the loan provider is entered into the land registry and will stay entered even after the loan is paid off. This means that the mortgage can be utilized as a line of credit for future projects that require financing.

This differs from a Hypothek, which is a financial loan that expires once it is fully paid off. This type of mortgage is less common than a Grundschuld because it is less flexible.

Learn more about mortgages in Germany in this article.

Taxes on selling property in Germany

One of the highest potential costs is capital gains/speculation tax (Spekulationssteuer), payable on any profit made from selling the property. However, sellers pay this tax for a property that was owned for less than ten years. Everything above that will free you from a tax obligation.

Furthermore, selling real estate is tax-free in Germany if you live in the apartment/house over a three calendar-year period (potentially as little as approximately 13 months, like during a period from December 2020 to January 2022).

Rented apartments can also be sold with no tax burden if they were rented out for at least 10 years. In any other cases, the seller will need to pay a capital gain tax. The amount depends on the value of the property and the selling price.

The profit from selling a property aligns with the seller’s marginal income tax rate, which means it can be taxed to a maximum of 42%.

Cost of selling a house in Germany

While many of the costs for property purchases are taken on by the buyer, the seller is also responsible for some. The most important ones are listed in the table below.

ServiceCost
Real estate agent3.57% of the sale price
Mortgage termination0.2% of the mortgage value
Property Valuation0.38% – 0.6% of market value
Advertising fees on an online portal€50 – €150 for two weeks
Real estate transfer tax/stamp duty (normally paid by buyer)3.5% – 6% (differs in every federal state)

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Anna

Anna is an enthusiastic expatriate with experience of living in Germany, Austria and Greece. She shares her passion for living abroad on this website.

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