Heritage | Lukinski

Selling apartments individually: Divide multifamily house – procedure and tips

Laura — Tue, 07 Mar 2023 08:56:31 +0000

Subdividing an apartment building & selling apartments individually – Selling an apartment building is a complex undertaking that requires good preparation and execution. Since the residential building consists of several tenants, the question often arises: Sell the entire apartment building or individual apartments? Find out here under which circumstances a division is worthwhile and what you have to consider regarding protection against termination, right of first refusal & Co.

Sell apartment house: complete or each apartment separately?

When it comes to selling an apartment building, there are several ways to do it. One possibility is to sell the entire building as a unit. Another option is to divide the building into individual apartments and then sell them separately. Both options have advantages and disadvantages that must be considered when making a decision.

You have these two options:

Sell entire property
Sell individual apartments

In most cases, owners decide to sell the entire property.

Advantages & disadvantages of a complete sale of the property

If you decide to sell the entire apartment building, the sales process is much less complicated for a complete sale. After all, it is easier to find a buyer for a complete building than for several separate apartments. At the same time, complete apartment buildings are less in demand than individual apartments or single-family homes, since apartment buildings are usually only of interest to capital investors and investors.

However, selling the entire building can also fetch a lower price because the buyer bears the risk of taking on potential vacancies and rental problems.

Here are the pros and cons:

Advantages: Easy & fast sale
Disadvantages: Low retail price

Therefore it is worth dividing the apartment house

In comparison, dividing the building into individual apartments can increase the selling price. Since each apartment can now be sold separately, it may also be easier to find a buyer for it.

However, the disadvantage of this is that the division of the building into separate apartments may involve additional costs, such as the construction of partition walls and the installation of separate utilities. In addition, you should allow enough time in advance, as a division of the apartment building must be carefully prepared and processed.

Advantages: Increased purchase price & many interested parties
Disadvantages: Cost and time intensive

Even if a division into several apartments requires a lot of resources, it can be worthwhile to divide the house into several ownership shares. To ensure that this works smoothly, you have a few things to consider.

Divide apartment building into individual apartments

In order to divide the apartment building into individual apartments and sell them separately, you need to take certain steps. We will now take a closer look at how this works.

Certificate of Completeness by Building Inspectorate

If an apartment building is divided into several condominiums, a condominium owners’ association (WEG for short) is created. An important prerequisite for this is the existence of a certificate of self-containedness in accordance with the German Condominium Act (Wohnungseigentumsgesetz). This certificate is issued by the responsible building supervisory authority and confirms that the individual apartments are self-contained. This means that they have a separate, lockable entrance, their own ceilings and walls, and their own WC.

These conditions must be met for an apartment to be considered locked:

Separate, lockable access
Own ceilings & walls
Own WC

Partition plan via architect or engineer

In addition to the certificate of separateness, you also need a partition plan of the entire building. This plan is an important part of the declaration of partition and shows how the building will be divided.

The most important information about the distribution plan at a glance:

Is additionally required
Shows division of the building
Includes location & size
Creation by architect or engineer

It must be prepared by a competent architect or engineer and indicate the exact size and location of each dwelling.

Notarization of the declaration of division

Once you have received the certificate of seclusion and the partition plan, you can prepare the declaration of division. This states that each owner will convert his or her property into co-ownership shares corresponding to the share in the entire residential complex. The declaration of division must be notarized to be legally effective.

Land register entry of the co-ownership shares

Finally, you must make the entry in the land register to secure the co-ownership shares. This is usually carried out by a notary, who draws up the title transfer deeds and applies for the entry at the relevant land registry office.

Once this step is complete, you can sell the apartment in question. But what happens to the tenants after the sale?

This is what needs to be considered: Right of first refusal for tenants

If you convert an apartment building into individual condominiums and sell them, you must bear in mind that the current tenants have a right of first refusal. This means that the tenants have the opportunity to purchase their current apartment on the same terms as agreed in the purchase contract between you and another buyer. The right of first refusal serves to provide the tenants with a certain degree of security and to ensure that they cannot be kicked out of their apartment without further ado.

However, it is possible that the tenant will not exercise his right of first refusal. In this case, you can sell the apartment to another buyer who is willing to fulfill the conditions of the purchase agreement.

Protection against dismissal when selling a house

In addition, according to the German Civil Code (BGB), the buyer is bound by the existing leases. This means that tenants retain their leases even after the house is sold and do not have to fear that they will be terminated.

So if you intend to sell the individual apartments in the apartment building, you must observe a notice lock-up period of at least three years. During this time, the new buyers cannot simply terminate the rental agreements.

Tip: To avoid potential conflicts between buyers and tenants when selling a house, you should include binding regulations in the purchase agreement. These regulations should refer to outstanding rent claims, operating cost payments and deposit repayments.

In summary:

Buyer is bound by existing leases
Termination of tenants after sale not possible
Termination lock period of 3 years
Tip: Record all formalities in the purchase contract

Conclusion: multi-family house apartments for sale individually

The decision whether to sell the apartment building as a whole or divided into individual apartments depends on various factors, such as the condition of the building, the location and the demand for housing in the area. If you decide to divide the apartment building into individual apartments and sell them, you can look forward to high sales prices. At the same time, it is important to consider both the tenants’ right of first refusal and the protection against dismissal.

Brokerage contract – The decisive facts

Laura — Sun, 15 Nov 2020 22:29:47 +0000

Real estate agent contract – Your decision to have your house professionally brokered is an important step towards a timely sale. After you have decided to take over the services of real estate agents, the contract is concluded.

You can choose between a simple, a sole and a qualified sole brokerage contract. If you want to remain capable of acting despite the broker’s commission and reserve the right of prior sale, you should refrain from a qualified commission and choose between the other two solutions when concluding the contract.

Content in the brokerage contract: These facts must be present

In a contract with your appointed real estate agent, all rights and obligations of both parties are explained in detail. An important contractual point is the agreed commission, which is to be paid by the buyer when selling and by the owner when renting. Other contractual contents are based on the scope of the services you want and which the estate agent undertakes to provide.

A brokerage contract becomes valid the moment it is signed by both parties. With your signature, for example, you instruct the estate agent to sell your house and to apply all the necessary measures to promote the sale. In the case of the qualified sole mandate, you further agree to the fact that you will not instruct any other estate agent and that you will not sell your property privately. In the contract, you will find out all the details and tasks that will be undertaken for the sale of the house and will be carried out by the agent himself. With brokerage contracts, the written form is necessary, so that verbally concluded agreements are invalid.

Contract is binding on both parties

Through the binding nature of a brokerage contract, you receive the security that the commissioned broker will do everything to ensure that your home is sold in a timely manner. All figures and tasks, the commission and its due date as well as special requirements for our brokers are included in the contract. The agent will advise you before the contract is concluded and together with you will find the form of contract that best suits your requirements for the sale of your house. He will draw up the contract for you in writing, leaving you time to check the details and commission any changes.

More information on the subject of brokers:

Sell

There are various reasons that make you think about selling a property. Many of our clients already own their own house or condo when they inherit their parents’ home and don’t know what to do with the inheritance now. Are you facing this question or have another reason for selling your house? Our professional online real estate agents will assist you and help to get the best price for the property and not put a long wait on the agenda in the course of the sale. While you can sell privately if you are the sole owner, a house or apartment owned by a community of heirs presents greater challenges.

Tasks of a broker

Basically, a real estate agent fulfils all tasks that are important before and during the sales and rental phase. He creates an exposé, determines the market value of your property, advertises your property and is then the interface between you and interested parties. While the creation and publication of an advertisement is a time-consuming but unique task, answering customer enquiries is part of the daily business of an estate agent.

Here you can find more information about the tasks of a broker.

Commission for the broker – The most important regulations

More than 80 percent of all properties for sale or rent are brokered. This means that the owner commissions a real estate agent to advertise the offer and to carry out all tasks up to the conclusion of the contract on his behalf. Professional brokerage is a service that is agreed between the client and the real estate agent. After the service has been rendered, a commission, the so-called brokerage fee, is due. Who pays the commission depends on the type of commission and the reason for the commission. If you sell your property through an estate agent, the buyer usually pays. In the case of lettings, the buyer principle has applied since 2015, so that the invoice recipient and commission payer is identical to the person who has commissioned a brokerage service.

Here you can find more information about the broker commission.

Selling real estate privately – procedure & risks

Laura — Tue, 15 Sep 2020 21:29:45 +0000

Selling property privately – There are various reasons for selling a house. A professional move, a change in your family situation such as a divorce, the move to a larger property or the financially necessary sale are among the most common reasons when a house should change hands.

In most cases, the house sale should go quickly and be realized without a long waiting period. When selling privately, you as the owner are heavily burdened as you have to do all the tasks yourself before and during each stage. Nevertheless, selling a house privately is quite possible, provided you take all the steps in the right order and are aware that you will have to invest a lot of time in the coming weeks or months in discussions with prospective buyers and in viewings.

Sales prices for private sale

Private sales often fetch a lower selling price than home sales through realtors!

Before you decide to sell your home without an agent, we would like to point out that there are immense errors in the offer pricing process. Have your property professionally appraised and don’t set the price until you know the fair market value of the home. This means that you will have to hire an appraiser and pay for the valuation. This incurs costs averaging 1,000 euros, causing some owners to forgo the important basis for determining the price.

Risks of private mediation

Subjectively valuing your home carries the risk that you will either price it too high or too low. A price that is too high will limit the interest of potential buyers, while one that is too low will result in losses. Generally speaking, homes sold privately tend to sell for less than professionally brokered properties. This fact is based, among other things, on the negotiating skills that are inherent in the profession and experience of real estate agents. If you as the owner want to sell quickly, the risk of selling the house below its actual value increases. Be aware of this fact and exclude it by orienting the price to the market value and have this determined by an expert.

Facts about preparation and sales processing

Before every house sale, the necessary documents must be obtained. You will need an extract from the land register, the energy certificate, a valuation, floor plans, proof of any land charge or proof that the property is not encumbered. Furthermore, the site plan and development plan, evidence of renovation and maintenance work carried out must be available. For the preparation of an exposé, you need pictures that present the property from its best side and thus promote interest. All descriptions must correspond to the truth, be meaningful and also include any defects.

Organisational matters: accessibility, documents

After publishing the exposé, you should check your availability by e-mail and telephone, as prospective buyers expect a prompt response and often an immediate viewing appointment. Be prepared for the fact that you will receive a particularly large number of enquiries in the evening and at weekends and should be available accordingly. The timing of viewings requires good organisation, as the appointments must harmonise with your everyday life and with the time possibilities of potential buyers.

If the intention to sell becomes serious, you will need documents from the interested party regarding creditworthiness and income, as well as confirmation that financing is guaranteed. The examination of these documents requires experience and must exclude that there are ultimately problems shortly before the signing of the contract, for example due to an unsecured financing. Only with a lot of time and attention can you sell a house from private without learning the pitfalls and forgetting important factors.

Objective valuation as a basis for private house sales

As an owner, you always have an emotional connection to your home. This means that an objective assessment of the selling price is very difficult or even impossible. There are memories in your property that lead to an overvaluation or a price below the real value, depending on the orientation.

Only if you base the offer price on the professionally determined market value can you really sell objectively and leave subjective feelings out of it. Most prospective buyers enter into a price negotiation with the seller. This is when mental toughness and negotiation skills become significant. You have determined the price, relying on fair market value. Now your negotiating skills are in demand if you do not want to undercut the price set for the property and achieve disadvantages along the way.

More information about selling a house:

Sell

Tasks of a broker

Here you can find more information about the tasks of a broker.

Commission for the broker – The most important regulations

Here you can find more information about the broker commission.

Costs incurred before the sale of the house

Laura — Wed, 05 Aug 2020 21:29:50 +0000

Costs of selling a house – Before you have sold a house and made money, you are faced with a number of expenses with costs that should not be underestimated. In addition to the valuation and the energy certificate as two of the largest items on your bill, numerous cost factors add up due to the organization of documents and the publication of advertisements. It can quickly add up to a higher four-figure sum if you sell your house privately and take on all the necessary tasks yourself. Time is also a factor that should not be underestimated and has an impact on the costs when selling a house. Are you looking for a solution that will allow you to avoid these costs and sell your house without having to incur any upfront expenses yourself?

House sale through real estate agent lowers your costs

The costs incurred in the sale of a house can be outsourced by a single decision and ultimately transferred to the buyer. If you hire a real estate agent, he or she will receive a commission after a successful sale. This covers all costs incurred for the preparation and the actual sale.

Unlike rentals, you don’t pay the cost of hiring a broker out of your own pocket. Rather, the broker’s commission appears in the ancillary purchase costs payable by the buyer. The calculation of the percentage of the broker’s commission is based on the expenses associated with the sale of your home.

Largest cost items in the sale of real estate

Selling real estate without a valuation always leads to a fiasco. If you set the asking price too high, prospective buyers will stay away and you will have to reckon with a long sales phase. If you list your property for far too low a price and sell below the real value, losses are a direct consequence. For a valuation you have to calculate an amount of 1,000 euros. In the second position, the energy certificate costs at least 100 euros, and 300 to 500 euros for a certificate of need.

Fees: Advertisements, photos, incidental expenses

Furthermore, there are fees for the publication of advertisements in real estate portals and you will also receive a bill from the photographer for professional photos that speed up the sale. The arrangement of viewing appointments increases your telephone bill, as you occasionally have to call back and make contact with prospective buyers. In practice, it turns out that the costs of selling a house go far beyond the known items and can become problematic if you, as the owner, have to pay in advance and come up with the money. In private sales, you have no way of transferring the expenses you have already incurred to the buyer, unless you want to unnecessarily increase the asking price for your home. The situation is different if you are selling through a real estate agent and the buyer pays these costs as an item in the ancillary purchase costs.

Buyer pays broker commission – you save costs!

You can protect yourself from all financial expenses in connection with the sale of your house. The buyer principle, i.e. that the client pays the broker’s commission, only applies to rentals and not to the sale of a house. You can therefore contact us without hesitation and opt for a brokerage contract in which all services and the amount of the commission are transparently listed and agreed with you.

As an item in the ancillary purchase costs, the percentage commission, which is based on the selling price of the property, is paid in full by the buyer. Selling the house through experienced real estate agents not only saves you high costs, but also a lot of time. Since you outsource all the home selling services and hire them professionally, you sell faster while having the assurance of actually getting the desired selling price. Real estate agents are experienced negotiators and take a strategic approach to selling a house. In doing so, the sale is made objectively and not on an emotional basis, as can rarely be avoided in private sales. Lower your costs and increase your chances of selling your house promptly and at the best price.

Save time with a broker

You also save costs by not having to spend time on the sale of your house. While you go about your usual daily routine, the agent will take care of the house sale for you, helping you to sell without any additional investment and to benefit from the professional services. The advantage of your cost savings is accompanied by the security of knowing that you are offering your home at the adequate price and getting the highest possible sale proceeds.

More information on the subject of brokers:

Sell

Tasks of a broker

Here you can find more information about the tasks of a broker.

Commission for the broker – The most important regulations

Here you can find more information about the broker commission.

Tips for selling a property

Laura — Fri, 15 May 2020 21:29:40 +0000

Real Estate Sales -Once you have made the decision to sell your home, the time of planning and preparation begins. You will need a wide range of documents, you will have to have the market value of the property determined and you will have to apply for the energy certificate for your property. You will also need an extract from the land register, the cadastral map and the development plan.

In addition, your knowledge of the market in terms of land and property prices in the location of your home plays just as important a role as knowing what the supply/demand ratio is. For the preparation phase alone, you must expect high costs and plan a lot of time.

What to look for before selling a house

The preparation phase is a crucial point in the sale of a house. Even though all steps in the process are of course equally important, optimal preparation determines whether you sell your house without complications or face organisational difficulties within the individual phases. The best way to prepare for a house sale is to use a checklist. Check off each item on it the moment you have completed it. If you decide to sell your property through experienced real estate agents, you will be competently taken care of from the first moment and will not have any work with this task.

We strongly recommend an expert valuation, on the basis of which the price of your property can be determined authentically and taking into account all factors. As the sums involved in selling a house are very high, you should never estimate the asking price, but set it on the basis of the market value. Be aware in advance that you will need to look more closely at the creditworthiness and income of prospective buyers and carry out research and valuations in this regard.

Sell your house only with complete documents

Some documents you already need for the preparation of the exposé. To publish a concrete description, the floor plan, the total size of the living space and the property, but also the energy balance are crucial. The application for an energy certificate can take some time, so you have to take care of the energy passport in time. In the sales processing phase, various documents and proofs are requested from prospective buyers. If you have these at hand and can present them when asked, you are optimally organised and leave a serious and well-prepared impression.

Every prospective buyer wants to have a look at the land register, the cadastral map and the development plan. You should keep these documents in a folder, as well as receipts for the maintenance of the heating and electrics, and for any renovation and refurbishment work that has been carried out. After the notarial certification, the buyer receives the keys and all documents belonging to the property.

What factors influence the bid price and justify higher prices

Among the most frequent questions from our clients are inquiries about how we determine the price and what factors form the basis of an offer. As experienced estate agents, we undertake the valuation of your home, incorporating all details relating to location, supply and demand, from market analytical results and condition, and amenities. To protect you from undervaluation or overvaluation, comparisons to properties with similar amenities in the same location of your home are included in the fair market value. We assure you that you will always achieve a higher price by selling through our real estate agents than by selling your house privately.

An important factor is experience in price negotiations, which always occur when selling a house. Prospective buyers want to lower the price, while you as the owner insist on your offer. With negotiation skills and a convincing appearance based on experience, you can be sure that we will achieve the highest price while ensuring that the buyer is satisfied and convinced of the offer.