Better not! The sale is only complete once the notarized purchase agreement has been legally signed. Until then, either party can withdraw from the purchase without giving a reason, even if verbal agreements have been made. However, many prospective buyers will not simply allow themselves to be strung along for weeks. Our tip: Set a strict schedule for the notarization.
Credit check: Can the prospective buyer afford your property?
Reversing the sale of a property and putting it back on the market can result in financial losses. If property seekers rediscover a property that should already have been sold, they become skeptical and wonder whether there is something wrong with the property. This can have a negative impact on the sale price. Professional real estate agents therefore carry out credit checks.
Assessing risk
Before signing the purchase agreement, real estate sellers need to know whether the prospective buyer can afford the purchase price and the ancillary costs. This is because the ancillary costs are joint and several liabilities. This means that the buyer and seller are both responsible for paying them. If, for example, the buyer does not pay the real estate transfer tax, the tax office can ask the seller to pay. The seller would then have to demand the real estate transfer tax from the buyer. The same applies to notary fees.
Check creditworthiness – credit agency
There are various ways to check the creditworthiness of a buyer. One is to obtain information from a credit agency such as Schufa. These agencies usually only provide information to members – but the fees for this are often high. In addition, according to Section 29 (2) of the Federal Data Protection Act (BDSG), a "legitimate interest" is required in order to obtain information. Proving this requires a certain amount of skill in wording.
Check creditworthiness – self-disclosure
Another option is for the buyer to provide self-disclosure. Sellers can agree with prospective buyers that the latter will request self-disclosure from, for example, Schufa and send it to the seller. Sellers should ensure that the information is up to date. It should contain the prospective buyer's personal data, credit scores that enable a risk assessment to be made, and positive and negative payment experiences.
Check creditworthiness – financing commitment from the bank
Another option is to obtain a financing commitment from the prospective buyer's lending institution. Sellers should ensure that the financing is secured if the loan is expressly intended to finance the property and the disbursement of the loan is not subject to additional conditions that could prevent timely payment.
Would you like to ensure that your prospective buyer is solvent? Contact us! We will be happy to advise you.
Notes
For reasons of better readability, the generic masculine form is used in this text. Female and other gender identities are expressly included insofar as this is necessary for the statement.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please have the facts of your specific case clarified by a lawyer and/or tax advisor.
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