What should be included in the purchase contract?

In Germany, all real estate transactions must be secured by notarized purchase contracts. The notary charges a fee for this, which is based on the value of the property. It amounts to around 1.5 percent of the purchase price.

The seller and buyer are free to agree which of them pays this fee. As a rule, it is paid by the buyer.

The notary is obliged to remain neutral towards both parties, i.e. the seller and the buyer. Both can contact him if anything is unclear. Both you as the seller and the buyer are entitled to receive the draft contract at least two weeks before the notary appointment. This gives you the opportunity to check the components of the contract or, in the case of a complicated transfer, to consult a lawyer.

In most cases, purchase agreements are standardized contracts. Nevertheless, you should pay particular attention to the deadlines associated with the property transfer.

The purchase contract must contain details of the seller and buyer and bank details through which the purchase price is to be paid. Furthermore, a description of the property (parcel map) and a current extract from the land register must be included.

If you sell a second-hand property, the clause "bought as seen" is usually included. This is because, unlike new buildings, which are still being built by a developer when the purchase contract is signed and the buyers receive a 5-year warranty on the building, you are not obliged to provide a warranty when selling a second-hand property.

In the case of second-hand buildings, however, defects are often explicitly included in the purchase contract, such as damp cellars of which the buyer became aware during the inspection. This provides you with additional protection.

In addition, various dates must be fixed in the purchase agreement, such as the date of payment of the purchase price and the date of transfer of the property. Sellers often want the buyer to take over and pay extra for additional items such as kitchen equipment, garden furniture or heating oil that is still stored in the tank. This should also be included in the purchase contract. However, these items are not included in the calculation of the land transfer tax.

Do you need help drawing up a legally compliant purchase agreement? Contact us now. We will be happy to advise you.

Photo: motortion