The key document is the purchase agreement. In the event of a direct acquisition by way of an asset deal, the real estate purchase agreement has to be recorded by a notary public. It usually includes the conveyance of title (Auflassung), i.e., a joint declaration by the parties that the title shall be transferred to the buyer. The parties instruct the notary public to file that declaration with the land register once the buyer has fully paid the purchase price. Upon registration of the buyer as new owner in the land register, the transfer is effective and legal title transfers.

Other documents typically involved in German real estate transactions include acquisition finance arrangements, asset/property/facility management agreements, other property agreements and due diligence reports on legal, financial, technical, environmental and/or insurance matters.

The scope of warranties and indemnities varies and depends on individual circumstances. A limited catalogue of representations and warranties is very common. As a minimum, the seller usually warrants that unrestricted title will be transferred (unless and to the extent encumbrances are not assumed by the buyer or disclosed in the purchase agreement). A buyer is often requested to conduct a comprehensive due diligence with respect to the property that limits the seller’s liability under the purchase agreement.

Principally, any undertaking governed by German law to sell or buy real estate must be notarially recorded. This form requirement covers all parts and understandings in connection with the sale, including letters of intent providing for transfer obligations or side agreements. The notary acts as an independent, impartial and objective adviser to all parties to a transaction. If the purchase agreement is concluded abroad, other form requirements may apply. However, in practice, a conclusion abroad is the rare exception, since the conveyance of title must be notarized by a German notary anyway. Noncompliance with the notarization requirement leads, in principle, to the invalidity of the entire transaction. In certain situations, an invalid transaction may subsequently be cured and become legally effective with the registration of the change of ownership in the land register.

Title transfer occurs upon the registration of the buyer as the new owner in the land register. However, beneficial ownership usually transfers at closing already after the purchase price has been fully paid.

The buyer usually pays for the following:

• Notary fees
• Due diligence costs for its consultants
• Registration fees
• Agent/broker fees
• Financing costs
• Own legal fees 
• Real estate transfer tax 

The seller usually pays for the following:

• Discharge costs for release of security not assumed by buyer
• Own legal fees
• Income tax on any profit made on the sale of the real estate

Under German mandatory law, the seller and buyer are jointly liable for the notary and court fees incurred for the recording of the purchase agreement (including the conveyance of title) and real estate transfer tax triggered by the transaction, even if in the purchase agreement they typically agree otherwise.