How to check documents when buying real estate
Got your eye on a property? Then you need to know which documents are important. 🤔
Documents when buying real estate: Do a thorough check!
Buying real estate is a significant investment and shouldn't be rushed. It doesn't matter if you're buying a property as a home or an investment for retirement or asset accumulation.
You should carefully check all the documents before buying a property. This isn't just to be on the safe side; it also ensures that you get your financing from the bank quickly. There are several documents without which your financing wouldn't go through anyway. The same goes for the notary's office.
In this article, you'll learn everything about the property documents you should check and can view checklists of docs you need for the bank and the notary.
Why check the documents when buying real estate, anyway?
There are plenty of excellent reasons to look at the documents. For starters, you're spending significant money on this purchase. You probably wouldn't spontaneously buy a bicycle or a new couch, right? Exactly. So it's safe to say: The bigger the investment, the more care you should put into your decision. And real estate is one of the largest investments you can make.
Especially if you buy a property as an investment, you should carefully check the documents in advance. There always will be a property that initially looks like a sound investment. However, damages, defects, or upcoming extensive renovations can have a major impact on the return of the property. And unless you're carefully examining the documents, you likely won't know about these things until it's too late. Of course, this means you have to put in a little work. But it's absolutely worth it. Thankfully, we've already done most of the work for you. Our marketplace is full of pre-checked properties where our experts have already reviewed the documents and digitally stored them for you to take a final look.
Found an exciting property? Here are the most relevant documents
If you've spotted a property you're interested in, there are a few documents of interest to you as a buyer. Only once you have an overview of them can you judge whether buying the object at the offered price makes sense.
These are the most crucial documents:
Checklist property document evaluation
Extract from the land register
Minutes of the owners' meetings
Rental agreement (for rented properties)
Photos of the property
Floor plan or living space calculation
Declaration of division
Of course, there are other documents that you can look at and that play a role. However, these are the most important for you as a buyer in the first step. So let's take a closer look at a few of them.
Checking the land register extract before the purchase
In the land register extract, you will find information about the property and the parcel number, i.e., the property's exact location. For you as a potential buyer, the entries regarding the owner, possible building encumbrances, mortgages, or usufructuary rights are the most important.
The extract from the land register should be as up to date as possible. Some banks accept an extract that is up to 6 months old. However, there are banks where the land register extract can be no older than three months.
Are investments necessary? Check the owners' meeting minutes!
The owners' meeting minutes tell you a lot about the property's condition. You can tell from the resolutions of the meetings whether there are any major pending renovations, repairs, or remodeling measures. It isn't necessarily a red flag but should definitely affect your calculations.
Taking a look at the rental agreement
Are you planning on buying a rented-out property? Then you have to take a look at the rental agreement. It will inform you of any existing special arrangements, e.g., for cosmetic or minor repairs, whether the kitchen belongs to the apartment or is part of the lease, if the agreement includes a parking space, or if tenants can use the garden.
Equally important, however, is how long the lease has been in place and, above all, when the last rent adjustment happened. Both of these aspects affect the return on the property.
Property pictures: Both exterior and interior shots
The importance of images depends on whether or not you've visited the property. But, at least for a first impression, pictures matter. They give you a good first glance at the property's state. The more recent and detailed, the better.
Ideally, there are photos of all rooms, the staircase, the basement, and the exterior. If you want to rent out the apartment, good images also have the advantage of not having to take any new ones for the listing.
Take a look at the floor plan or living space calculation
You should definitely check if there are floor plans for the property. They're essential if you want to sell the property at some point and give a good overview of the space. Having them redone can be expensive.
It is also essential to look at the living space calculation. It plays a vital role, especially if you plan to rent out the property. Rents are calculated according to size. However, not all rooms play an equally important role in the size of a property. Rooms with sloping ceilings, for example, or balconies and terraces are only calculated proportionally. Garages, utility rooms outside the apartment, basements and laundry rooms, boiler rooms, or rooms with a height of less than 1 meter do not count as living space at all.
The declaration of division: one of the most vital documents when buying an apartment
When buying a condo, the declaration of division is one of the most important documents. It states which areas of a house belong to whom. In other words, it lets you know what is common property, what belongs to the individual owners, and if there is any special property.
However, freehold apartments can't be sold without a declaration of division, anyway.
These are the most crucial property documents that you should view. If everything fits, you can take the next step.
Here are the documents your bank requires
Most people who buy an apartment take out a mortgage for it. Before the bank approves your mortgage, they have to verify your creditworthiness. To do that, they need you to submit these documents:
Checklist bank documents
Employment contract or salary statement
Current income tax assessment
Current pension information
Proof of existing equity capital
In addition, the bank wants to know whether you own other properties, pay off loans, or have other income. Listen to this podcast episode to find out which documents you need for your financing with Urbyo. 👇
Documents required at the notary's office when buying an apartment
Once you have negotiated the purchase price and the financing is in place, you need to visit the notary's office. The notary confirms the conclusion of the purchase contract. These documents must be available for this purpose:
Checklist notary documents
Current extract from the land register
If applicable, leasehold contract
Worried about drowning in paperwork? We've got a solution
Let's be real: Especially for newcomers to the real estate market, that's a lot of documents to sift through. Good news: You don't have to go through it alone.
Our marketplace is full of properties with documents our experts have checked in advance. Your contact will also guide you step by step, from the property inspection to the financing and the purchase contract. If you want to enter the real estate market comfortably and transparently, book your appointment for a non-binding meeting here.