Expensive, more expensive, notary — is there no way around it?
The costs of a notary may seem insignificant at first glance. What is one percent of the purchase costs that notaries usually charge? However, if you look more closely at notary fees, you quickly realize that these are anything but insignificant. Imagine you want to buy a fantastic loft in your favorite district in Berlin for one million euros. The notary fees of one percent mean an additional 10,000 euros for you. In addition, you will also have 5,000 euros for the land register entry, which amounts to approximately 0.5 percent of the purchase price. The notary fees, which actually sound so harmless, now amount to 15,000 euros. And what exactly are you paying for? You can find out what a notary does and when you can't get past a notary in the following article.
Notaries — are generally known! Or not?
Even if you don't immediately know what a notary does or what he is even entitled to do under professional law, every one of us has certainly seen a notary before. Maybe not shaken hands in person, but certainly on TV. Namely in TV shows such as “Der Preis ist heiß”, “Schlag den Raab” or “DSDS”. This is because notaries may make draws and raffles, act as neutral arbitrators and store valuables, such as shares. However, notaries are mostly associated with the notarization of real estate contracts.
Nothing is free — why it doesn't work without it!
On the one hand, the notary is self-employed as a freelancer, but at the same time also holds a public office. You can't get past a notary, at least not when it comes to certain legal transactions. The legislator requires a notarial certification for certain legal transactions so that they are legally effective at all. Notarized translations play an important role in visa law, for example. Notarization is also essential, particularly for real estate transactions, i.e. purchases, sales and transfers of real estate. Marriage contracts and inheritance contracts also require a notarial certification to be effective.
More appearance than reality?
The notary receives his money not just for reading out a contract law document. Because a notarial certification serves more than simply formal proof of a real estate purchase. At the same time, the notary also informs the parties involved about possible risks and the resulting consequences for the contracting parties involved. So that each of the contract partners can ultimately understand the scope of their actions. But does that justify the high notary fees? Where do they come from? The high costs for the notary when buying real estate are due, among other things, to the fact that the fees for the services of a notary are prescribed in a fixed schedule of fees. As a result, the usual market mechanisms of supply and demand do not come into play, and certainly not the negotiation skills of the customer. In addition to these notary fees, which are unfounded in the market economy, you must also expect extremely high ancillary purchase costs when buying a property. This is because when buying real estate, there is also a significant real estate transfer tax, the amount of which varies from state to state. The amount of real estate transfer tax is between 3.5% and 6.5%. Taxes and notary fees have already spoiled the desire of many willing people to buy real estate. But are there ways to reduce these costs?
Thanks to blockchain — smart help in sight?
In the future, the blockchain could take over the tasks of notaries and then complete the whole thing faster and at the same time cheaper. The aim of blockchain is to make transactions on the Internet secure in order to protect them from manipulation. The role of the notary as an independent control and confirmation body could thus be replaced by the blockchain. This means that, for example, a land registry entry can be anchored in a blockchain network. Thanks to crypto technology, the entry within the chain is immutable, irreplaceable and verifiable. In principle, a procedure that could replace the previous notarial land register entry. This may be a way to avoid the high costs of a notary in the future. In Sweden, for example, the land registry office is now using the blockchain for land register entries. The Swedish land registry office expects the switch to digital crypto technologies to increase efficiency and associated cost savings. If it works, it may be a future model for Germany.
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