14 Dec Three major steps to buying an apartment in Berlin
Buying an apartment for yourself or to let out is an extremely personal decision, and you’ll want to have the information on the process before you begin. As a foreigner purchasing property in Berlin is definitely a possibility, but it can feel a bit overwhelming, but if you’re prepared and have a good team to work with you it can go smoothly and be one of your best decisions.
Berlin’s neighborhoods vary greatly in personality and they each have their own pros and cons. It’s best to visit and take some time to look around before you buy property if you don’t already live in the city, but with so much information about the city it’s easy to get a good idea of the lifestyle, amenity and public transport around each. With Berlin expanding so much these days, it’s also well worth looking a bit further out to less publicized areas like Köpenick, Steglitz, or Pankow. These areas offer cheaper purchase prices, but still enjoy direct public transportation to the center by S-bahn and bus. And with the growth of the city, many neighborhoods are rising in popularity and are growing their own unique niche. Some of the city’s best hidden gems reside in the outskirts of the city, too!
Costs of purchasing a Berlin apartment
Having an accurate understanding of your finances and the cost of an apartment in Berlin is key to successfully embarking on buying a property. When you’ve researched the neighborhoods, you’ll have a better understanding of what fits into your budget. New buildings and apartments directly in the center will obviously come at a higher price, but by European standards, Berlin is still one of the cheapest place to buy an apartment. It’s also key to be aware of the finder’s fee associated with certain apartments. Some apartments require a commission paid by the purchaser, which can be around 6% of the purchase price, and others are available without. Buying a tenanted apartment often comes at an especially reduced price, but you’ll need to be aware of wait times until you can move in or possible renovations needed. Some apartments only need minor renovations to yield excellent return or to be the perfect home for you to settle into. Most people don’t have the money to simply buy a home in Berlin, so knowing how you can finance your property purchase will be of great help. The maximum loan available for a mortgage depends on your resident status as residents can borrow up to 80% of assessed value and non-residents can borrow around 50-60% of the assessed value. Calculate a feasible down payment and monthly mortgage cost, and work with a reputable finance professional to get the best rates. Certain brokers are specialized in issues of international financing.
Germany is a land famous for bureaucracy and it can often be a long and slow process. While that can be frustrating, once it’s done, it’s done. Be prepared to take it slowly when you’ve decided on buying property in Berlin. Many steps take time. You’ll need to set aside time to visit various apartments to see what suits your wants and needs, and once you’ve decided on one you’ll need to make an offer. When the offer has been accepted the paperwork and contracts will take time to be written up and signed by the correct parties, a notary will draft up the contract, parties will sign, a mortgage will get finalized and after that the notary will register the sale. Berlin property prices have remained relatively stable over the years, so it’s well worth taking the time to invest in the search and have patience after the purchase, and in the end it pays to own your very own home in Berlin.
By Alice Bauer