Would you like to sell your condominium, but don’t know whether it’s worth it for you? For a layperson, there are many challenges when selling an apartment. In the following article, we therefore look at the costs that can arise when selling your condominium and give you the tips and tricks you need to effectively save money and reach your goal with as little stress as possible.
What costs are incurred when selling a condominium?
For most people, selling a condominium properly means achieving the highest possible profit in the end. However, it is often overlooked that there are also some expenses involved, the majority of which are borne by the seller. What you should therefore consider when selling your condominium relates in particular to the costs associated with the sale. These include
- the valuation report
- Renovation and cleaning
- Marketing
- Documents
- the notary
- the broker
- the early repayment penalty
- applicable taxes
The valuation report
Let’s now look at the costs in detail. Although an appraisal by an expert is not mandatory when selling your condominium, it gives you as the seller a guideline for your sales negotiations with the potential buyer. You are theoretically free to negotiate the price for your valuation report, but you can expect fees in the range of 0.38 to 0.6 percent of the market value of your condominium.
You can also obtain an estimated price by means of a brief appraisal for a few hundred euros, and some online portals even offer your appraisal free of charge. However, as such appraisals have no legal relevance, they are more suitable for providing an initial indication.
Renovation and cleaning
Renovation is also a voluntary service on your part, but it can help you to achieve a higher selling price – because first impressions count! Even small repairs or targeted accessories can speed up the sale of your condominium. Professional home stagers can help you with this, adding the necessary finishing touches to your home with strategically placed decorations. Ultimately, however, the relationship to the selling price will determine whether you should renovate your home before selling it.
The situation is different with pre-sale cleaning, however, which gives your condominium a like-new appearance at a relatively low cost and should definitely be considered in order to appeal to a wider range of prospective buyers.
Marketing
The right marketing strategy can be crucial to a quick sale – as can how you present your condo online and in advertisements. To present your condo in the best possible way, be sure to use sharp, well-lit photos that show your condo from all angles.
Some real estate portals offer you the opportunity to advertise your condominium free of charge – but we advise you not to do so, because for just a few hundred euros, depending on size and placement, you can attract significantly more users on a well-visited real estate portal and quickly find a suitable buyer.
Documents
Since 2009, one of the documents you will definitely need to sell your condominium is an energy performance certificate.
In short, a potential buyer will find information on the energy efficiency of a building in the energy performance certificate, but it does not provide any specific information on energy costs, as these depend on the heating behavior of the occupant, among other things. The energy certificate must be reissued every 10 years and can either be drawn up on the basis of heating and utility bills, for which you can expect to pay between 50 and 80 euros, or by a specialist via a comprehensive on-site analysis, for which you will pay around 300 euros. If you sell your condominium without an energy performance certificate, you could face hefty fines of up to 15,000 euros.
If your condominium is part of an apartment building, you can only sell it with a declaration of division. This regulates the division of a building as well as the rights and obligations of the respective owners. The declaration of division includes, for example, how costs incurred, such as for repairs, are divided among the owners and how the residential complex may be used. It is essential for an entry in the land register and must be notarized. The costs incurred for a declaration of division are between 70 and 140 euros.
In addition to the energy performance certificate and the declaration of division, you will also need an extract from the land register when selling your condominium, but this can be obtained as a certified copy for as little as 20 euros.
Notary
If you sell your condominium, you will also incur notary fees in any case, as there is no transfer of ownership without a notary and therefore no change in the land register.
Notary fees are regulated by law and amount to around 1.5 percent of the purchase price, while around 0.5 percent is charged for entry in the land register.
Example: If you sell your apartment for 250,000 euros, the costs for the notary are around 3,750 euros and the entry in the land register is 1,250 euros.
However, the buyer of the condominium usually bears these costs; you as the seller are exempt.
Broker
The decision to sell your condominium with or without an estate agent should be weighed up carefully. Because with commission varying from state to state from 3 to 7 percent, estate agents are quite expensive – if we again assume a sales price of 250,000 euros for your condominium, this is calculated at up to 15,000 euros – no bargain. As a rule, the buyer and seller therefore share the costs.
If you are familiar with local supply and demand and real estate in general, you may even be able to save yourself these costs. In any case, you will have considerably more work to do if you want to sell your condominium yourself – because your estate agent will not only take care of finding a suitable customer, but will also support you with marketing and drawing up the contract.
Early repayment penalty
An early repayment penalty comes into effect if you sell your loan-financed condominium earlier than you have paid it off – the bank may incur an interest loss, which will be charged to you at a maximum of 1 percent (0.5 percent if the remaining term is less than one year) of the remaining debt. Nevertheless, the amount can quickly add up to several thousand euros for large loans. You can find out more about early repayment penalties in our article on early repayment penalties.
Is the sale of a condominium subject to tax?
As the seller, you are not liable for tax as long as you do not sell your condominium commercially. The legislator only assumes that you are acting commercially once you have sold four properties within five years – the amount of tax is calculated on the basis of the increase in value resulting from the sale of the apartment on the one hand and your personal income tax rate on the other.
Real estate transfer tax
Property transfer tax is also a significant cost factor, but you can breathe a sigh of relief – this is payable by the buyer. Between 3.5 and 6.5 percent is payable on the purchase of a property or plot of land, depending on where you live in Germany.
Speculation tax
However, if you have owned your condominium for less than 10 years and would like to sell it, the so-called speculation tax comes into play. This is an income tax on private transactions, which can be quite high at up to 45 percent on the increase in value. However, speculation tax does not apply if you lived in the apartment at least part of the time before the 10-year period expired.
You can find a detailed explanation of speculation tax in our article “Selling an apartment – legally avoiding speculation tax”.
Ancillary costs when selling an apartment: a sample calculation
Now that we have identified all the potential additional costs, let’s get an initial overview with a small calculation example. If we assume a sales price of 250,000 euros for your condominium, the following calculation could result if you do not have to pay any early repayment penalties or speculation tax, but do hire an estate agent.
Valuation report: 0.5% x 250,000 = 1,250 Euro
Energy certificate: 300 Euro
Declaration of division: 100 Euro
Land register extract: 20 Euro
Marketing: 100 Euro
Broker: (5% x 250,000) x 0.5 (half) = 6,250 euros
Total amount: 9,020 euros
A clear summary of the costs of selling a condominium
Vendor
| wdt_ID | Kosten | Höhe | Optional/verpflichtend |
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Buyer
| wdt_ID | Kosten | Höhe | Optional/verpflichtend |
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Frequently asked questions
What happens to the maintenance reserve when a condominium is sold?
If you sell your condominium, the maintenance reserve is transferred to the buyer and remains in the reserve account of the owners’ association. The reserve can only be drawn on in the event of short-term liquidity bottlenecks.
Can I sell a condominium in my family below its value?
As the law does not specify how much a condominium must cost, you can generally sell it to members of your family for less than its value. If you sell it to your children for 1 euro, for example, it is not a pure gift, as there is a certain consideration – the gift and the associated taxes only relate to the difference between the purchase price and the actual value of the apartment.
