Answer to question number 10

There are two types of payment of the purchase price in Germany:

1) through a trust account of a notary public

2) directly to the seller’s account

3) Payment through a notary’s trust account:

This method is most preferable for foreign buyers of real estate in Germany. In this case, when the sale contract is signed by the notary opens a special trust account (Notaranderkonto), through which all cash transactions are settled. No one has access to this account except the notary.
On average, the buyer is given two to four weeks to deposit the purchase price and additional purchase costs into the trust account (notary fees, real estate acquisition tax (Grunderwerbsteuer), legal costs for the preliminary and final registration, obtaining an extract from the land register, etc.).
Details of trust account should be specified in the contract of sale, and the notary additionally sends a letter about the opening of an account and the need to pay within the period specified in the contract.
To make a payment to the bank shall be provided with the following documents: contract of sale in German, the contract’s translation into Russian, a letter from the notary about the opening of a trust account and the notice from our company in Russian on the need for payment indicating full bank details in international format.
After the buyer pays the specified amount to the trust account, the notary makes all necessary payments from the trust account as bills are received: Land Court account, financial services, etc.
The purchase price is paid to the seller only after the following prerequisites for payment have been met:

Erasure by the seller of all existing debts and encumbrances recorded in the land records
Payment and receipt of the superintendent’s permission (if required) to join the society of owners
Entry of provisional registration in the land register in favor of the buyer (Auflassungsvormerkung)
Payment of all other fees

2) Direct payment into the seller’s account.

In some cases, a direct payment of the purchase price into the seller’s account may be required. Here, too, the buyer assumes no risk, as the purchase price may only be paid into the seller’s account after the following prerequisites for payment have been met

Erasing all existing debts and encumbrances recorded in the land records by the seller
Payment and receipt of the superintendent’s permission (if required) to join the society of owners
Entry of provisional registration in the land register in favor of the buyer (Auflassungsvormerkung)
Payment of all other fees

When the above prerequisites have been fulfilled a special notification (Preisfälligkeitsbescheinigung) will be issued by the notary, stating that all prerequisites for the payment have been met and that the purchase price has to be paid into the account of the owner.
In this case, both the seller and the buyer are also protected, because once the purchase price has been paid, the provisional entry in the land register is guaranteed to be changed to the final registration of the new owner.