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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?

Market value assessment for selling property

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.

First evaluation method: hedonic estimation

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.

  • Advantages: the hedonic method is inexpensive and does not take long.
  • Disadvantages: hedonic estimation is not very precise as it does not usually take into account the special features of individual properties

Second evaluation method: capitalized income value method

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.

  • Advantages: the method is particularly suitable for properties that generate income, regarding them as investment properties.
  • Disadvantages: this method is less suitable for private residences, while investment properties such as hotels or other commercial properties benefit more from the approach.

Third evaluation method: real value method

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.

  • Advantages: this method is suitable for properties that are difficult to compare and/or when little comparative data is available about other properties.
  • Disadvantages: the building structure is a key factor in the real value method; the influence of the real estate market plays only a minor part in the evaluation.

Preparing your property

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:

  • Clearing up: Chaos does not sell. Move personal belongings out of the way and make sure the interior is tidy. Tip: a vase of flowers will brighten up any room.
  • Cleaning: Lime stains and dust will prevent visitors from seeing the attractive sides of the property. Have the property thoroughly cleaned by professionals. This will make it look inviting, and visitors will be impressed by the well-kept interior.
  • Lighting: Make sure your house or apartment is lit well. During the day, all the blinds should be pulled up to allow enough daylight in, for instance. Artificial light can help by strategically placing lamps to illuminate dark corners.
  • Painting: Bright and gaudy colors on walls are a matter of taste. To show the property in its best light, don’t hesitate to give it a new coat of paint. Classic white or other subtle colors look fresh and can make rooms look bigger.

Which documents are important when selling real estate?

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:

  • Land register plan: Land register plans are of great importance for both private individuals and public authorities. They provide precise information about the position, shape and size of individual plots of land, as well as the buildings and infrastructure on them. They are particularly relevant when applying for mortgages and building applications.
  • Land register extract: the extract from the land register contains important information on legal aspects, such as details of owners and easements.
  • Proof of building insurance: When a property is sold, the building insurance is automatically transferred to the new owners. This insurance offers protection against damage caused by fire or flooding, for example. It is important to note that in almost 20 cantons in Switzerland, buildings require compulsory cantonal building insurance.
  • Floor plan: A floor plan provides information about the possible uses of a building. One of the key features is connectivity, or how the rooms are linked to each other.
  • Proof of renovation work: Proof of renovation and refurbishment work should also be included in the sales dossier, as it can increase the value of the property. This includes certificates for energy-efficient renovations.

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.

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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.

  • Professional photos are vital, as they can create a positive first impression. They show the house from the best perspective, highlight its advantages and spark the interest of potential buyers. Inviting photos of bedrooms, kitchens, living areas and the exterior give a comprehensive image of the property and increase the attractiveness of the sales offer.
  • The property description should be concise and informative. It should not only list the basic characteristics of the property, but also emphasize any special features. Make sure you describe the beautiful garden or mention any specific architectural details. However, stay factual and don’t embellish things too much to avoid sounding fake.

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

  1. Guide visitors through the property in a professional manner: Make sure you show up for viewing appointments on time. Dress correctly when showing people around – follow the “business casual” dress code to be on the safe side.
  2. Be flexible about appointments: Don’t be too difficult when it comes to arranging viewings. Be prepared to adapt to the schedule of potential buyers.
  3. Answer questions: Be willing to answer questions and emphasize the positive aspects of the property. Clear communication establishes trust.
  4. Determine a negotiation strategy: Set clear targets for the sales price, but be prepared to compromise. Consider in advance how much room for negotiation you have. Realistic price expectations are crucial – an inflated price will only put people off. A professional real estate valuation can be extremely useful.
  5. Professional assistance: Consider going through a real estate agent for the negotiation stage. They usually have experience in negotiations and can obtain a good price for your property.

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.

Closing the sale

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

How to pay less real estate capital gains tax

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.

Replacing your home: selling a property, finding a new one and saving on taxes

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?

  • Delay the sale if possible, to reduce the real estate capital gains tax
  • Have a real estate valuation carried out to determine the price of the property
  • Prepare for the sale: clean and repair the property and put together a sales dossier
  • Advertise the sale: have professional photos taken, describe the property objectively and place an advert on real estate portals
  • Viewings: tidy up and arrive on time
  • Negotiations: define a sales strategy and remain willing to compromise
  • Think about buying a replacement property to save on taxes
  • Buy a new property within a certain period of time (one to five years)
  • Notify the previous municipality of residence of the replacement purchase
  • Consult a bank advisor if you are unsure about anything

Conclusion

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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