Although a mandatory step for most home owners, selling a property is often associated to stress. There are many reasons for selling: moving away, an expanding family or a need in financing or capital. And in most cases, a good selling price is of paramount importance to the success of the future project. Here is a small guide to help you approach the sale of your property with total confidence.
Don’t forget the energy passport!
Since November of 2007, establishing an energy passport (CPE), a document clarifying a property’s energy needs, is mandatory for all property sales. Its classification system by letters is similar to those used by household appliances: “A” indicates optimal energy performance, “I” indicates high energy consumption.
After the signature of the deed, you will need to hand an original copy over to the buyer. An energy passport is valid for a ten-year period. You should check the establishment date of the document before putting your property up for sale.
For an existing house and if no CPE has been established yet, you will need to contract a habilitated company. Consider a budget of at least €800. If you already have a valid CPE, but have since undertaken renovations that may impact the passport result (isolating façade, double-glazing windows, removal of thermal bridges, etc.), it is often very beneficial to establish a new passport in order to improve your CPE classification.
Valid on the entirety of a residence, it is quite probable that a passport is therefore already available for your apartment. Your “syndic de copropriété” (the co-ownership property representative) can probably provide you with an original copy of the document.
Even if there is no legal obligation to do so, it is often also a good idea to gather the different invoices, recurring charges, General Assembly resolutions of the past 2 years, and other property documentation. This allows the future buyer to estimate his future property charges and take note of all the expenditures that he will not have to bear in the near future.
Increase your chances of a better deal
Before putting your property on the market, think about small actions that can facilitate the sales process and increase the attractiveness of your property.
Doing small finishing touches with a high added value can often be a good investment.
- Small renovations with high impact. Doing small finishing touches with a high added value can often be a good investment. A simple layer of paint on the walls can radically transform the rooms’ feel and help the buyer fall in love with the property. To freshen the look of your home, it is often worth investing several hundred euros (around €400 including labour for a 12sqm room). To help buyers project themselves, choose neutral colours and particularly white, which maximises luminosity. Putting new skirting boards, changing broken tiles or replacing damaged elements are additional examples of small renovations that significantly impact the perceived quality of the property. Quality finishing touches will reassure potential buyers.
- Clean and tidy. Rigorously cleaning and tidying your home will have a positive impact on buyer interest. Emptying rooms of all excess objects and storing them in a rented storage unit will not only maximise the perceived size of the rooms, but also help buyers project themselves. For happy pet owners, diminishing smells that could come from animals is also a must.
- Getting the timing right. Don’t rush into a sale. Be clear about your own timing, because it will have an impact on the whole process. Putting a property for sale too far in advance could be a bad idea, especially since property prices vary so quickly. Putting it for sale too late would put you under pressure, forcing you to sell it at a suboptimal price.
Choosing the right real estate agent
If you are part of the property owners that will try and sell yourself, this section does not concern you. For the vast majority however, read carefully! Being assisted and advised by an estate agent facilitates the process and allows you to benefit from the know-how and professionalism in order to get a better result. But how to choose your agent?
Don’t be seduced by an agent that presents a price that is well over the other valuations (…)
Our first advice would simply to bring several agents in order to get different valuations and compare them. Your objective is to obtain the most realistic valuation, in order to maximise your sale price all while ensuring the liquidity of the property. Don’t be seduced by an agent that presents a price that is well over the other valuations – an overestimated property will stay longer on the market, which will ultimately damage its credibility. Should you be in doubt, you can use the online tool myVALUATION that allows you to get an indicative and objective valuation based on market-transaction prices in Luxembourg.
The agent’s experience and professionalism are also key elements to take in account in your decision – he will be the one representing your property. Before accepting an agent, browse his other listings to evaluate their general quality. A comprehensive description, a floorplan and other attention to details are features that are appreciated by buyers. Professional photos, most vital marketing element in a listing, will also considerably increase visit requests and ultimately, the number of purchase offers. The example bellow shows the importance of taking quality photos.
Smartphone picture vs. professional picture by Nexvia
Finally, your agent should be able to analyse the applicable “plan d’aménagement général”, the strategic urban planning document that dictates construction regulations in the area. He should therefore be aware of expansion or construction potential for your parcel, elements that can heavily influence a buyer’s decision.
Selling your buy-to-let investment or your inherited property
The tips and rules that were discussed until here for primary residences are also valid for buy-to-let investments or inherited property. Several differences should however be noted.
Exempt for primary residences, the capital gain tax is however applicable on real estate investments, inherited property and secondary residences.
Exempt for primary residences, the capital gain tax is however applicable on a real estate investment, an inherited property and a secondary residence. In your calculations, take in account the tax you will have to pay when selling. To precisely calculate the amount you owe the fiscal administration, you can use the myGAIN tool. If you are thinking about selling quickly, it is important to note that the capital gain tax is halved for any sale before the 31st December 2017. In an investment logic, you can take advantage of this tax cut to realise your capital gain, and reinvest the capital in one or several other buy-to-let investments.
When selling a buy-to-let property, you should take in account the presence of a lessee. An inhabited rental investment will be more difficult to sell than an empty one. It is sometimes preferable to rethink your timing or adapt your sale strategy to take in account that parameter.