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Selling real estate
Do you want to sell your home? We offer valuable tips and show you how to plan the sale properly.
Content:
Buying a home is not always a decision for life. People often need to sell their property due to changes in their family situation or a relocation for professional reasons. But how do I sell my house? What tax aspects do I need to consider and what should I bear in mind when buying a new home?
Your home is priceless for you. But if you want to sell the property, nothing beats a realistic price estimate. This is crucial for achieving an optimum return. An excessively high sales price can deter potential buyers, while a price that is too low will lead to a rush of interested parties, and at best to lower profit for the seller.
That’s why a good market value assessment is so important. There are various estimation methods that can be used. They are explained below.
Hedonic estimation classifies a property according to various quality traits and compares these criteria with other properties. This method is based on a large volume of data and determines the value of a property using statistical calculations. The costs of the hedonic method vary from provider to provider and can amount to several hundred francs. However, estimation can be free if you use an online tool.
If you determine the value of your property using this method, your estimation will include any future costs that could be incurred and returns that could be generated, such as the potential net rental income of an apartment building.
The real value method is also known as net asset value estimation. In principle, the value of the property is determined as if the same building had to be constructed new. A reliable valuation of the building structure is required. In other words, the new value is calculated and added to the land value. The construction costs that would be necessary to build a new property are then deducted from the total. Devaluation over time is also taken into account.
Good preparation is crucial when selling residential property. First of all, the property should be thoroughly checked for defects. Repair or renovate your home where necessary. You should also check all the important components and interior fittings: heating systems, washing machines, dishwashers and ventilation systems are just as important as the façade, the floor or the windows (and window sealings).
Once you have spruced up your property, you can get ready to show the first visitors around. It is important to consider home staging, i.e. presenting the property in an attractive way for marketing purposes. However, there are a few points to bear in mind to ensure that this is successful. They include:
To guarantee a smooth sales process, you should have a comprehensive sales dossier ready for potential buyers. This will simplify negotiations considerably. It should include the following documents in addition to pictures of the property:
Additional documents may be necessary depending on the requirements and local regulations.
Real estate agent or private sale?
If you decide to sell your property, you can either take care of it yourself or seek advice from a specialist. A good real estate agent knows their way around the real estate market and can make use of their network connections. But this does not come free. Real estate agents usually receive a commission. It is therefore best to find a neutral specialist. Many banks also offer real estate appraisals.
The perfect advert
A successful sale starts with a perfect advert that will appeal to prospective buyers and provide all the relevant information. Two crucial elements that play a central role are professional photos and an attractive property description.
Choosing the right real estate portals for your advert is also important. Opt for real estate platforms that your target group is likely to consult. Don’t hesitate to use social media or to place adverts in local newspapers. A well-thought-out marketing strategy can help your property sell faster and at a good price.
Tips on viewings and negotiations
If your advert has the desired effect, you can get ready to show the first visitors around. What matters now is careful preparation for viewings and skillful negotiation.
Tips for successful viewing and negotiation
Overall, careful preparation and skillful negotiation are crucial to ensure a smooth sale. Increase your chances of success by offering prospective customers a positive experience whilst adopting a flexible, transparent approach to negotiations.
There’s no general rule as to the best time to sell a property. It depends on a number of factors related both to the seller’s personal situation and developments on the market. The time of year can also play a role in the sale.
Personal factors: how they influence when to sell
There can be various reasons for selling an apartment or house: maybe you’re beginning your well-earned retirement and want to live closer to family. Or after a divorce, you’re not only separating from your partner but your shared property too. Family situations often change over time, especially when children move out. In most casesthe property is still encumbered with a mortgage, which is why it’s best to check which options you have under the prevailing circumstances before selling.
Tax-related factors: the timing of the sale influences the tax burden
Taxation can also play a role: profit from selling a property is subject to property gains tax. The longer the property is owned, the lower the tax. It’s calculated in full years in almost all Swiss cantons. So it may be worth waiting a few months before selling, until another full year of ownership has passed, as you may benefit from a lower tax category in some cantons.
If you want to buy a new property for your own use immediately after the sale, the property gains tax can sometimes be deferred. Depending on the canton, this purchase must take place within two to four years.
Economic factors: keep an eye on the market when selling
Before you sell your property, you should not only know the estimated value, but also the current market conditions. At what price have comparable properties been sold recently? How has the real estate market developed in your region or canton? Are there more interested parties than providers or is it the other way around? How do the forecasts look?
It’s worth taking a look at the economy here: if the economy is on the upswing and people have more money, they may be more willing to invest it. This can lead to higher demand and therefore higher prices. If the economy stagnates or contracts, the purchasing power of potential buyers also decreases.
An important criterion here is the level of interest rates: if interest rates are low, more potential buyers can afford a property because mortgages become cheaper. In addition to fallingmortgage interest rates,rising rents create interest in owning a home. For you as a seller, this means you can adjust your offer in accordance with the demand if necessary. In addition, you can choose between several interested parties. This can lead to you receiving your desired amount sooner. Also note that it is not always advisable to wait for better economic conditions. It can happen that you miss the right moment and have to sell for less than your desired amount.
It’s also worth taking a look at the۶Ƶ Real Estate Bubble Index: it depicts the situation on the housing market with key figures such as the price-income ratio and the percentage of construction investment in gross domestic product. The higher the value of the bubble index, the more overpriced properties are – so the price is not in fair proportion to their actual value. The index can be used to identify where a real estate bubble may be developing or already exists.
Seasonal factors: when is the best time to sell a property?
The good news: there is demand for property all year round, and every season has its pros and cons when it comes to selling. Spring and summer are usually ideal times to sell, as many people are looking to buy and will be able to view the house in daylight and the garden in full bloom. However, as this time of year is a popular moment to sell, there will be a high level of competition from other properties. Many buyers are still interested in looking for a property in fall, and demand only starts to level off somewhat in winter.
If everything goes well and you manage to reach an agreement with the interested party, the next step is to sign the sales contract. The notary plays an important role in this process. They are responsible for drawing up the contract and for ensuring that all the parties understand it and are correctly informed. They will then set the subsequent transfer of ownership in motion. The sale becomes official when the information has been entered in the land register. Once everything has been paid for, nothing stands in the way of handing over the keys. The notary usually takes care of the handover.
After the sale
When you sell a property, you have to pay real estate capital gains tax. In simple terms, the difference between the purchase price and the sales price is taxed at the rate applicable in the relevant canton. Real estate capital gains tax is also dependent on the duration of ownership. There may be cantonal differences. A deduction according to the duration of ownership is permitted by the tax legislation in the canton of Bern, for example. Paragraph 1, article 144, states that if the taxable person has owned the property sold for at least five years, the capital gains on the property are reduced by two percent for each full year since the acquisition, up to a maximum of 70 percent. In the canton of Zurich, on the other hand, the property gains tax is reduced by three percent each year from a qualifying period of ownership of five full years, according to paragraph 225 of the Zurich tax legislation. Is your home located in the canton of Zurich? If so, it may be worth waiting a little while before selling your property.
If you are selling your house or apartment to relocate to a new area, you will probably have to look for a suitable replacement property in your new place of residence. By selling one home and then purchasing a new one, you are buying a replacement property, so to speak. You can save money if the replacement property is in Switzerland. According to article 12, paragraph 3, of the Direct Taxation Harmonisation Act (DTHA), taxation is deferred if the proceeds from a residential property occupied permanently and exclusively by the owner are used within a reasonable period of time to purchase or build a replacement property for the same use.
How do I apply for a tax deferral?
You can apply for a tax deferral by contacting your previous municipality of residence or the cantonal tax authorities. It is best to inform the local tax authorities about your plans before buying the new property. Although the tax authorities will assess a real estate capital gains tax, they will temporarily defer it. If the purchase of the replacement property goes ahead, the real estate capital gains tax will be definitively deferred in accordance with article 12, paragraph 3, DTHA.
House sale checklist: what should you consider when selling a house?
The process of selling a property often takes several months. A whole year can easily go by between placing the initial advert and signing the final contract. It is important not to be in too much of a hurry, as in many cases this will mean that you obtain a lower selling price than you had hoped for. Get in touch with a notary, the land registry and the bank in good time so that the transfer of ownership will be processed rapidly.
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