Notary for the Purchase of a House

When Is a Notary Required for the Purchase of a House?

The purchase of real estate (regardless of whether it is an apartment, a house, or a plot of land) requires notarisation of the purchase agreement. This requirement is mandatory under German law (Section 311b (1) of the German Civil Code – BGB). Without notarisation, the contract is generally invalid. The notarisation requirement applies to all agreements in which the seller undertakes to transfer ownership of real property.

Notarisation serves the following purposes:

• Legal clarification: During notarisation, the notary ensures that both the buyer and the seller fully understand the legal implications of the contract. As an independent and neutral authority, the notary provides clear and objective explanations and answers any questions that may arise. This helps prevent parties from entering into agreements they do not fully understand.
• Evidence: The notarised purchase agreement is signed and sealed by the notary and retained in official custody. As a public deed (Section 415 of the German Code of Civil Procedure – ZPO), it provides particularly strong evidentiary value regarding the conclusion and content of the agreement.
• Protection and caution: For many people, real estate represents a substantial portion of their assets. The requirement of notarisation ensures that property transactions are not entered into hastily or without due consideration of their financial and legal consequences.

How Does the Notary Appointment Work?

The notary appointment for a real estate transaction generally follows a standard procedure. After a brief introduction, the notary reads the contract aloud, explains the relevant provisions in a neutral manner, answers any questions, and the parties then sign the agreement.

However, the notarisation appointment is only one step in the overall purchase process:

• Initial agreement The process usually begins with an informal agreement between buyer and seller regarding the essential terms of the transaction, in particular the purchase price. Once a basic agreement has been reached, a notary is selected to handle the transaction. It is common practice for the buyer to choose the notary, as the buyer generally bears the notarial costs.
• Preparation Following contact with the notary, the appointment is prepared. The notary requires all relevant documents relating to the property. If the buyer finances the purchase through a loan secured by a land charge (Grundschuld), the corresponding documentation must also be provided. The notary’s office coordinates the required documents with both parties. If a real estate agent is involved, this coordination is often handled by the agent.
• Notarisation appointment Once all documents have been reviewed and the draft contract has been finalised, the notarisation appointment takes place. For transparency and legal clarity, both buyer and seller usually attend in person. In exceptional cases, representation by an authorised agent is possible. In such cases, the power of attorney must at least be notarised. Alternatively, the contract may be signed without a power of attorney and approved subsequently by notarisation. During the appointment, the contract is read aloud, discussed, and may still be amended. The agreement is then signed.
• Completion and execution After notarisation, the notary oversees the execution of the purchase agreement. This includes ensuring that the purchase price is paid only once the transfer of ownership is legally secured. In most cases, appropriate contractual safeguards make the use of a notary escrow account unnecessary. The notary also communicates with the land registry, public authorities, and the tax office. For example:
  • A priority notice (Vormerkung) is entered in the land register to secure the buyer’s claim to ownership.
  • Public authorities are consulted regarding any statutory pre-emption rights.
  • The tax office is involved for the assessment of real estate transfer tax. Once this tax has been paid, the tax office issues a clearance certificate required for the final registration of ownership.

Please note: Appointments with Notaries am Gänsemarkt can be arranged flexibly and at short notice. We are happy to assist you.

Which Documents Are Required for the Notary Appointment?

The documents required depend on the individual case and the entries in the land register. An overview of the necessary information and documents can be found in our forms section.

However, the following documents are always required from both buyer and seller:

• Identification: A valid identity card or passport is required for identification at the notary appointment.
• Tax identification number: The notary requires the tax identification numbers of both parties, usually provided in advance.

If the buyer finances the purchase through a loan, the notary must also receive the land charge documentation. Any existing land charges registered in the seller’s name are typically deleted as part of the transaction.

What Are the Notary Fees for the Purchase of a House?

Notary fees for real estate transactions are governed by the German Court and Notary Costs Act (GNotKG) and generally amount to approximately 1% of the purchase price. The exact amount depends on the value of the property and the scope of notarial services provided. In most cases, the buyer bears the notary fees, which also corresponds to the statutory rule under Section 448 BGB. Costs related to the deletion of existing land charges are typically borne by the seller.

Additional costs may include:

• Real Estate Transfer Tax: The purchase of real estate is subject to real estate transfer tax. The tax rate varies by federal state; in Hamburg it is 5.5% of the purchase price. The tax is generally payable by the buyer.
• Land Register Costs: Fees are incurred for registrations in the land register. These costs are typically lower than notarial fees and are generally payable by the buyer.
• Real Estate Agent Fees: Where a real estate agent is involved in the transaction, agent fees apply. These fees are typically shared equally between the buyer and the seller.

What Does a Real Estate Purchase Agreement Contain?

Real estate purchase agreements generally include standard provisions as well as clauses tailored to the specific transaction. Typical provisions include:

• Subject Matter of the Purchase: The purchase agreement specifies in detail the property being acquired. This typically includes precise provisions concerning the property, for example its size, condition, and any movable assets sold together with the property.
• Purchase Price: The purchase agreement typically specifies not only the amount of the purchase price but also the deadline for payment. For tax reasons, a detailed allocation between land and buildings may be appropriate in order to evidence depreciation potential to the tax authorities.
• Handover Date: The parties agree on the date on which the property is to be handed over. As a rule, the handover takes place immediately after payment of the purchase price. On this date, the keys are handed over to the buyer and all costs and charges associated with the property are transferred to the buyer.
• Warranty Provisions: The purchase agreement determines whether the seller assumes any liability or whether such liability is excluded. In certain cases, specific guarantees may also be provided.
• Security Arrangements: In most cases, buyers finance the purchase by means of a loan secured by a land charge (Grundschuld). The disbursement of the loan is usually conditional upon the registration of the land charge in the land register. Accordingly, before the loan is paid out and the seller receives the purchase price, the land charge must be registered in the land register. The purchase agreement therefore contains provisions specifying under which conditions a land charge may be registered against the property.
• Enforcement: In the event that the purchase price is not paid or ownership of the property is not transferred, the notarised deed may constitute an enforceable instrument, provided that immediate submission to enforcement has been declared. This eliminates the need for further court proceedings in the enforcement process.