Do I have to inform the bank before the sale?

It is advisable to make contact early to clarify the redemption amount and any potential early repayment penalties.

Can the buyer take over my land charge?

Generally possible if their bank agrees. In practice, the old land charge is usually deleted and a new one registered.

Who takes care of the cancellation of the land charge?

The notary's office coordinates the cancellation with your bank and the land registry (Grundbuchamt).

Selling a property that is not paid off

A property does not have to be paid off to be sold. The purchase price is then first used to redeem the loan, and the remainder is at your disposal. With the right coordination between the bank and the notary's office, this runs smoothly.

How redemption works

The notary's office obtains the redemption amount and the cancellation permit for the land charge from your bank. The buyer then pays part of the purchase price directly to your bank, and the rest to you. This ensures that the buyer acquires ownership free of encumbrances.

Early Repayment Penalty

If a fixed-interest loan is redeemed prematurely, the bank may demand an early repayment penalty. After ten years from disbursement, there is a special right of termination with a six-month notice period. Also, check whether the bank calculates the compensation correctly – errors are not uncommon.

Using the property as collateral

Those who sell to buy new may, under certain circumstances, use the existing property as collateral for the new financing or transfer the loan. Bridging finance covers the period until the sale. This should be discussed with the bank early on.

If the purchase price is not sufficient

If the remaining debt exceeds the achievable price, the difference must be offset by own funds or negotiated with the bank. A realistic valuation before marketing begins provides clarity here.