Monday, December 31, 2012

Selling a House in Germany

Just some observations of an American when you come around to selling a house in Germany.

First, starting a sell in December or January......may not be to your advantage.  Typically, and there might be different arguments to this.....but no one buys property much in Germany during the winter period.

Second, there is a real estate agent fee which a buyer must pay (figure around 5k to 10k Euro) if there is a real estate agent involved.  If you the seller.....performing all the work and advertises on your own.....there is no fee for the buyer to toss into the purchase.  So, it might be to your advantage for the first 90 days to advertise in the local paper or Scout24.

Third, your local German paper will have a real estate section once a week.....typically on Friday or Saturday.  It'll have several house or renovation stories as part of the section.  Once a year, there's a piece to spell out where home prices are in the local community.

This piece will feature the top ten communities around the town and what the price per square meter equals.  You will note.....it's divided into four columns (needs renovation, average, good, or excellent).  These columns will have two numbers.....this year and the past year.  So you can tell if prices are advancing or declining.

Fourth, these categories of "needs renovation".....average, good, or excellent?  You generally ought to know the condition of your house, but if not.....ask a couple of neighbors.  You might have bought the house eight years ago while it was excellent, and not put any money into the house over eight years.....thus now making it good.  Or maybe you bought a property a decade ago, spent a couple thousand Euro a year to renovate it, and turned a average property into a good property.

Fifth, should you invest any money now before the sell to influence the pricing scheme?  There are special renovation guys now who know how to pick out a dozen minor projects to enhance a house and ensure it absolutely looks average, good or excellent.  The cost?  Well....this gets to being a problem.  You might have to spend 5k Euro.....maybe even 15k Euro.  Is it worth the money?  Maybe, but you can't tell.

Sixth, prices go up on properties?  You might own a property for ten years that you bought for 150k Euro, and put 20k in renovations into the place over that decade.....and now....the house is still worth 150k Euro if you go by the charts in the newspaper.  Yes, it's very possible that local prices stay almost the same.

Seventh, could you turn a 150k Euro house into a 200k Euro house?  You'd have to do a major landscaping job.....put in solar panels......do some fancy custom work in the house, and make the interior and exterior a dream house.  But you'd probably have to spend at least 75k to make this kind of price increase on your investment.  Most folks aren't that willing, and you'd still lose some money on the effort in the end.

Eighth and final.....selling a house in need of major renovation is a pretty hard situation.  You can figure your pricing will stay less than 70k Euro for the house, and it might take a year to find someone who really wants the troubles of renovation to make a cheap house into a great place.  Getting top dollar for a place in need of renovation?  Don't count on it.  You might have to lower your price by half.....to get it sold in the end.

Just some comments from an American.

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