How to Make a Good Profit Selling Your Home

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How to Make a Good Profit Selling Your Home

For sale: How do owners get a good price?

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When selling a home, homeowners must not only ensure an appropriate sales price, but also keep costs low. Capital.de shows how property owners get the most out of it

Selling a property can be a challenge. Private owners, in particular, generally lack market knowledge and experience. Whether you inherited the house from your parents or are about to sell your own house, which you have carefully renovated yourself: in many cases the emotional connection with the house is strong. And it is therefore difficult to objectively assess the value of the property. Since the reversal of interest rates in June 2022, when central banks raised their key rates for the first time in a long time, the sale of real estate has been far from a guaranteed success. “The market has moved from a seller’s market to a buyer’s market,” explains Stefan Rauch, vice president of sales at Immoscout24. Demand is back, but it is spread across a significantly greater supply, from which buyers benefit.

At the same time, financing is much more difficult than before the interest rate turnaround, says business expert Rauch. So, bad times for property owners who are considering selling? Maybe. But with these expert tips, sellers can still get good prices and avoid unnecessary costs.

Beware of the speculation tax

First, sellers should consider whether they should pay a speculation tax on their sales proceeds. Owner-occupied buildings are not subject to this tax. A property is considered owner-occupied if the seller used the living space himself during the year of sale and during the two previous calendar years. Sellers can only sell exclusively rented property tax-free ten years after purchase. The speculation tax can significantly increase sales costs – and therefore significantly reduce profits. “If you want to sell a rented property after eight years, for example, you have to think carefully about whether it is worth waiting the last two years,” explains Julia Wagner, head of the house’s civil law department. from the owners Haus und Grund. association.

The tax rate is based on the seller’s personal income tax rate. An example calculator from Immobilienscout24 provides information on the tax amount in the particular case: The seller realizes a sales price of 500,000 euros. He bought the property for 350,000 euros and paid 35,000 euros in additional purchase costs, including the broker, the notary and the early repayment penalty to the bank. The profit from the sale is therefore 115,000 euros. It is subject to a speculation tax rate of 42 percent because this is the seller’s marginal income tax rate. The speculation tax due therefore amounts to the staggering sum of 48,300 euros.

The best investment during a sale: the agent

The tax issue has been clarified, the sales process itself now begins. “Many private sellers underestimate the effort required to sell a property,” explains Rauch, Immoscout expert. He therefore advises almost without reservation to mandate a broker to carry out the sale. Julia Wagner from Haus und Grund also sees it this way: “I have to ask myself what I can and want to achieve as a private person,” says the expert. Especially if a seller lives further away from the property and therefore has to travel long distances to view the property, it is hardly worth the effort to do everything yourself, explains Wagner.

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Brokers, for their part, know the market environment of a property and can therefore make a realistic assessment of the price. According to Immoscout expert Rauch, this is crucial for a successful sale: “The most important factor for a profitable sale is a good price assessment.” A broker incurs brokerage fees. But buyers and sellers generally share them. In addition, brokerage fees depend on the amount of the sale price. The broker is therefore encouraged to obtain the best possible purchase price.

In most cases, the investment is worth it because the professional manages the sale much more efficiently than the inexperienced individual: many brokers are also real estate appraisers. They have networks of other service providers who can, for example, create professional plans or prepare the property for sale. Last but not least, brokers take photos, put properties on portals, handle showings and know what should be in the purchase contract. In poor markets, they may still know potential buyers. “All this saves sellers a lot of time, stress and perhaps even problems – and ultimately this also has a cost,” explains sales expert Rauch.

Which investments increase profits?

A popular marketing method is something called home staging. Service providers or brokers professionally stage the property in order to present it in the best possible way in photos and online. This gives potential buyers an idea of ​​what grandma’s cottage might look like after a renovation – without sellers having to invest too much. Basically, experts advise against making expensive investments before selling. Whether you meet the taste of the following residents is rather a matter of luck. Haus-und-Grund expert Wagner and Immoscout expert Rauch agree on this point.

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