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Closing costs in Germany are quite high... about 12%. - 3.57% RE commission - 2.00% notary - 6% for the land transfer tax And the seller also pays 3.57% of

• onlyrealcuzzo 3y ago
  Why is the notary making 2%?! Is that including all legal fees? Even still that seems like a much bigger rip off than a buyer's agent in the US.
  • pierat 3y ago
    That signature is made with a realllllly heavy pen, I guess?
  • hef19898 3y ago
    A nortary makes sure the sale ia properly exevuted and titles properly transferred, he is certifying the transaction and takes on some legal riks dor doing so. This provides legal security for seller and buyer, a service woth paying for in transactions most people only do once in their life (we talk about Germany here). For all others, it is just coat of doing business. No idea why it is always everybody else who should work for free.
    • debacle 3y ago
      Might be a different meaning of the term notary. In the US, you can become a notary public for $35 and an online course in many instances.
      • hef19898 3y ago
        You cannot be elected? In all seriousness, notaries in Germany are all full lawyers and practices are highly sought after, as the numbers of lisvensed notaries is limited.
        • tecleandor 3y ago
          In Spain, Notaries and Property Registrars are a weird thing. You have to pass an exam, same as a public servant, and the number of positions is limited. But you don't have a regular salary like any other public servant: you set up a private office and get the money directly from your clients. The price for the actions is regulated but it's high, and the number of licenses is limited, so generally they have hefty salaries, specially compared to the rest of the public servants and the mean of the population. Their salary can be very variable based on location (as you get the money directly from your clients), but it's said to typically be from 100K to 200K€
          • mariojv 3y ago
            My eyes popped at that salary for a notary in Spain given most eng positions seem to pay under 60K euro. It looks like they need a law degree, too, so I'm sure they offer legal services other than property transactions? https://www.notariado.org/portal/en/how-to-be-a-notary https://www.notariado.org/portal/en/how-to-be-a-notary
            • deleted 3y ago
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      • Tangurena2 3y ago
        In many states, notaries can marry people as the actual legal step of notarizing the marriage license and returning it to the county clerk's office is the actual deed that makes people legally married.
      • deleted 3y ago
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      • statusgraph 3y ago
        Seems like it, the parent poster is almost implying there's an element of underwriting the transaction/house for which 2% is not unreasonable (Title insurance is in the 1% (or a bit less) range in the US I believe)
      • jcranmer 3y ago
        In the US (and I think most common law jurisdictions), a notary public is basically Certificate Transparency for legal documents. The notary records that so-and-so signed such-and-such on this date in their log, and if you have any doubts about that, they can produce that log for you to prove to that they witnessed it. By contrast, civil law notaries are generally full-on lawyers who are trained and intended to perform several legal tasks.
    • esrauch 3y ago
      Does the notary provide the title insurance (as in: if it turns out later that the seller didn't actually own the house, the real owner shows up and proves it, the bank and new buyers have their money covered)? That would make more sense for the 2% but it's not related to the notary in the US; notary literally just does "I checked the id of the person signing and it matches" which is a service that can be had for free at your bank or at most $50 if you have to pay someone, 2% of a house for that service obviously wouldn't make sense.
      • dagw 3y ago
        A notary in the UK is a type of lawyer (although not necessarily a solicitor) and requires special certification and training. Their job is to make sure all the paper work is in order and to sign off and legally certify that is in fact so.
      • hef19898 3y ago
        In Germany you cannot sell real estate thatbisn't yours, ownership is registered. The notary, as part of his job, makes sure this title transfer is done properly. If the seller isn't the owner, the sale is void, as far as I know sales price is to be paid once the title transfer was requested and approved, upon proof of payment the notary finalizes it. So basically no title insurance needed. By the way, excerpts of the registry for the real estate in question are part of the sales contract (just remembered).
        • esrauch 3y ago
          Ownership is registered in the US and part of the sale is a "title search" to check that and then update the registered title when the sale is executed (both handled by an attorney). The case of title insurance is only where something weirder happens with wills, contracts, or liens. If there was an owner that died in 2016 and his will said "split my house to all surviving children". And at the time one child shows up who believes they are the sole surviving descendant and claims the house and sells it in 2017, then 2018 a second heir finds out their estranged parent died and shows up to say "actually half of this house was mine, that guy didn't legally have the right to sell it even without any fraud occuring". Title insurance ends up 'fixing' this problem so that the buyer and actual-should-have-been-owner can both be made whole (and they go after the seller for the amount they didn't actually own, but sometimes that won't be possible to recover). If you don't have title insurance you as the buyer just take the liability that you might not actually own the house (or part of the house) if the record was mistaken and needs to be corrected. In Germany would this just be a case where if the will is executed and you find out too late the inheritor would be screwed with no way to get what you owned instead?
    • nmcfarl 3y ago
      This sounds a lot like a ‘title company’ to me.
    • tecleandor 3y ago
      Sounds more like a lawyer or several competencies at the same time. In Spain the notary "just" works through the signature of the contract: - Checks the identities of the parties and their legal status - Makes "sure" both parties understand the contract - Verifies that the property can be sold (checks for legal issues in the national registry) - Serves as a legal witness to the signature - Sends a copy of the contract to the national registry (but AFAIK, doesn't follow up) The cost here, for that, is around 500-800€. It's regulated by law. Then you have to contact a registrar to make all the legal papers to make all the legal papers in the national registry. That's araound 300-400 €, I think.
      • codedokode 3y ago
        Aren't most of the checks automated? E.g. you just fill a form in a government services website and get a PDF back?
      • PaulDavisThe1st 3y ago
        In the US, this can be done by a title & escrow service. They hold the deposit money (assuming there is some, which is normal), and then at closing they will do all of the above, as well as receiving and distributing funds from the buyer/mortgage company.
    • mihaic 3y ago
      Validating property rights is a fixed-time operation that seems to be one of the basic services a state should offer. I read the parent poster naturally asking why 2% instead of some lower, fixed amount.
    • UncleMeat 3y ago
      "Free" and "paid $15,000" don't seem to be the only two options.
  • thiago_fm 3y ago
    The 2% is worth it. It's an expensive, but essential step in Germany. Because there isn't a default real estate purchase contract, so you need to trust that you'll receive the property. It's like paying a lawyer to mediate an expensive purchase, and they carry some legal risks with it. They also do the bureaucracy with the government to add your name to the Grundbuch (it's a book from the government about who owns what % of a property), and also clean up the previous debts that it had (they are written there).
  • mytailorisrich 3y ago
    Because they have a captive market: In general the use of a notary is mandated by law, and being a notary can be extremely regulated with limited numbers of notaries/licenses. They could open this to competition and let lawers do the job as well, but that would go down badly with the notaries who make a fortune.
• benjaminwootton 3y ago
  In the UK, the market rate 1.5% paid by the seller on completion. Nothing to the buyer and rarely any fees for a failed transaction. Then approximately £1000 in legal fees when buying or selling. Then the big one which is stamp duty (a government tax) which is between 0 and 12% of the purchase price. Typically the lower end of that scale though. (https://www.gov.uk/stamp-duty-land-tax/residential-property-rates https://www.gov.uk/stamp-duty-land-tax/residential-property-...)
  • rwmj 3y ago
    It's important to note that (in general) sellers pay the estate agents fee and buyers pay stamp duty. If you are both buying and selling then you'd pay both, but on different properties. However if you're moving to/from rentals, dead or moving abroad then you'd pay only one. Also it's possible to cut out the estate agent if you really want to save money. There are a bunch of websites that for a minimal flat fee will let you DIY it, but be prepared to make your own for sale sign, photograph your own property, and show prospective buyers around.
    • _benedict 3y ago
      Those websites usually include (or at least offer) professional photography, and some also offer various levels of agent assistance for viewings, negotiations etc. an a la carte offering of sorts. A for sale sign is often included as it’s free advertising for them.
    • mytailorisrich 3y ago
      Well the estate agent is the agent (i.e. employee) of the seller: They work for the seller. It's quite normal that they are paid by the party who employs them!
  • enlyth 3y ago
    In the UK we also have one of the worst systems for buying and selling property which on average takes 3 months or more for a single transaction and everyone can walk away at any point until exchange of contracts for whatever dumb reason. As a buyer you will spend thousands on legal and survey fees before you even know if there is anything wrong with the property. Legal fees are more like 2k+ these days (source: buying a house)
• geff82 3y ago
  Germany has high fees when buying a house, but compared to the US it is dirt cheap to actually own the house. „Ground tax“, similar ro „property taxes“ in the US is usually just a few hundred Euro a year. Which, compared to the US, is change money. A German house, when the mortgage is paid, feels like real property.
  • benjaminwootton 3y ago
    I would hate the high US property taxes. It’s like you never really own the property if you are being taxed on it continually. It must play havoc with retirement planning?
    • Tangurena2 3y ago
      In most states, property taxes are what pays for schools, roads, libraries and things like that. When I was modernizing our state's motor vehicle registration system, I had to account for those fees in every vehicle (cars, boats, mobile homes, etc) registration cost. The state constitution states that things can only taxed based on value. Taxed based on value: https://apps.legislature.ky.gov/Law/Constitution/Constitution/ViewConstitution?rsn=203 https://apps.legislature.ky.gov/Law/Constitution/Constitutio... Value based on fair market value: https://apps.legislature.ky.gov/Law/Constitution/Constitution/ViewConstitution?rsn=201 https://apps.legislature.ky.gov/Law/Constitution/Constitutio...
  • criley2 3y ago
    The tax man gets his one way or another. Imagine the shock of an American living without sales tax when they go to Germany and everything has a 20% government markup... In Germany, the net average tax rate on a worker is 37.4%, in America it is 24.8%. That's a dramatic difference in taxation!
    • tempsy 3y ago
      Anyone living in California or NYC and making mid six figures and up is easily paying more than German tax rates then. You’re paying almost 50% around high six figure range. I’ve never quite understood why people think the US is a low tax country.
• voisin 3y ago
  There are land transfer taxes in Canada too, and I presume our equivalent to notary are lawyers which are about $1,000-$1,500. The actual in-and-out costs are significantly higher than just the agents, though the agents are the most expensive and of questionable value.
• bequanna 3y ago
  Sounds like a tax problem, not a commission problem.