Selling property for parents, grandparents and loved ones

As a child, you worry about mom and dad; as a grandchild, you worry about grandma and grandpa. Retirement savings don’t last forever, and neither do the savings. At some point, the property becomes too big, and at the same time the savings become less and less. At the latest now, a solution must be found for your loved ones!

What to do when you need to sell?

Prevention is better than aftercare: options

Before it is about expressions of grief, it is about good solutions. People grow old and at some point, life has to be organized appropriately. For many, this means selling the house and moving into an age-appropriate condominium. Accordingly, close people have to make decisions. This includes living wills, in case your loved ones are no longer able to make their own decisions at some point. But it is just as much a part of thinking about your own property.

One thing is also Important: First and foremost, do not think about your own inheritance, but about the family!

Let’s take a look at the 3 options for your understanding: Sale of the property, partial sale and real estate annuity! Tip, you will find further links to all three topics, with detailed explanations. What to do when someone gets old? Here are three alternatives!

Options in the sale of real estate:

1. Real estate annuity – selling with lifelong right to live
2. Partial sale – Proportionate, with option for total sale
3. Sale – Complete sale of the property

In addition, for owners: an extra tip on the subject of bequeathing correctly.

Real estate pension: sale with extra “pension” – Option 1

Your first option is the real estate pension. The real estate annuity is especially interesting for people who have already reached a higher age, usually from 70, 75 years. Should you prefer a solution in which your relatives can stay in their own property until the end of their life (!) without any complications, then the life annuity is an option you should consider.

Life annuity means that the property is sold in its entirety, but the owner retains a full right of residence and use until death. These privileges are secured by the usufructuary right. In addition, the seller receives a small, monthly extra “pension”. Another advantage, they no longer have to worry about maintenance costs in the future. This is the responsibility of the new owner. All in all, a comfortable solution, especially in old age.

Real estate pension simply explained:

• Direct, complete sale
• Lifetime right of residence and use
• Small, monthly “extra pension” for former owner
• No maintenance costs

Read more about topic here:

• Real estate pension

Unconcerned and reassured into old age.

Partial sale: Proportionate, with possibility of total sale – option 2

The second option for your loved one, if you want them to be able to continue living in their property, whether it’s a condo or a house, is to partially sell a property.

A partial sale works like this, you sell the part of a property, usually between 10% and 50% pro rata, to a finance company. For this sold part, the financial company charges a so-called “usage fee”. The user fee is paid in return for the fact that sole residential rights and rights of use are still granted. This means that the finance company merely becomes the partial owner. The advantage: you get the sale price relatively uncomplicated, without a major credit check, as with loans from the bank. The disadvantage: the user fee is relatively high, e.g. compared to a mortgage loan.

Partial sale summarized:

• You sell a part of your property (usually 10-50%)
• Partial purchase house: Yes
• Partial purchase apartment: Yes
• Partial purchase of land: Yes
• Financial company becomes part owner
• You remain the sole user of the property
• You pay monthly usage fee
• Total sales in X years (optional)

Read more about the advantages and disadvantages here:

• Partial sale property

Complete real estate sale – option 3

Your third option, if you need to find a solution, is the complete sale of condominium, house, apartment building. For the regular process, the question often arises, sell privately or sell with broker? Especially the emotional situations, such as deciding on the future of their own parents or grandparents, it is recommended to work with an experienced broker. After all, it is about all the advertisements, communication with interested parties, selection according to serious, unseriös, the subsequent credit checks, arrangement of viewing appointments and many more. Of course, also a big factor, the previous real estate valuation.

Read more here:

• Sell property

Selling real estate: Procedure and steps

To give you an initial overview of how such a sales process works, explained here in 18 simple steps, categorized into 3 phases.

1. Preparation: prepare property and sale
1. Financial planning and timing of sale
2. Hire real estate agent
3. Records and documents
4. Increase real estate value
5. Determine offer price
6. Create exposé
2. Sales phase: market property and find buyers
1. Market real estate
2. Contact with prospective buyers
3. Filter and select prospective buyers
4. Credit check
5. Viewing dates
6. Sales talk & purchase price negotiation
3. Sales processing: purchase contract until handover
1. Draw up purchase contract with notary
2. Notary appointment
3. Land register entry and payment processing
4. Handover of the property
5. Notary fees & broker commission
6. Pay taxes

These 3 options are primarily available to you.

These were the most important tips for selling with and for your loved ones!

Whether a condominium in a prime A-location or a…

… Condominium in 60/70 prefabricated building:

Extra tip: Bequeath / inherit correctly

Here are a few extra tips for you.

Sale with usufruct

If you are considering a direct, outright sale of your parent’s, grandparent’s or loved one’s property, be sure to take a look at usufructuary rights. Usufructuary right simply means “lifetime, sole right of occupancy.” So, it means that your loved ones hold the sole right to use the property, even after the sale. The same applies in other cases, such as an anticipated inheritance (link above: Inheritance).

Advantage: The usufruct right brings you the advantage that your relatives are not dependent at any time, on the goodwill or the consent of the seller.

Inheritance in advance: Taxes & Co.

Tip. Before it is too late, talk to your parents and grandparents about the inheritance early on. After all, an early inheritance can save you quite a bit, especially on taxes. Learn more about early inheritance here:

• Bequeath correctly

For heirs:

• Inherit correctly

Inheriting correctly also often means preventing disputes among children.

Take care!

“Sell half of the apartment”

Sell quickly, get money quickly, that’s what more and more want, who find at an advanced age that their own 4-walls are getting too big. Whether 3-room apartment, 4-room apartment or even comfortable 5-room and more.

Those who want quick money for the condominium, more and more often looking for “partial sale apartment”. Because one hears of many advantages: Fast, uncomplicated, no credit check. That’s true, but there is also a disadvantage, the user fee, which you pay monthly afterwards.

Quickly sell 10-50% shares of an apartment

The different sellers buy apartment shares between 20% – 50%. If the market value of your condominium is in the 7-digit range, you can sometimes sell “only” 10% of the apartment.

• Up to 1 million value = 10-50
• Over 1 million value = 10-50

Here schematically shown with 20% sold share, a 3-room apartment:

Partial sale condominium: what is it?

First, let’s start with the definition of the partial sale of an apartment.

What is the partial sale of an apartment?

As described at the beginning, you sell apartment shares between 20% – 50%. You sell the shares to a financial company. This makes you a condominium owners’ association consisting of two parties. In return you get the proportional purchase price quickly transferred, independent of banks / loans.

Fast money, sounds great or?

Whether selling in Berlin, Hamburg, Munich, Cologne or even “smaller” cities, there are advantages to paying the purchase price quickly without any credit check (compare credit at the bank). But there are also disadvantages: The user fee and likewise with the total sale.

Usage fee = rent for your apartment

After partial sale = you have to pay usage fee

The finance company becomes the partial owner of your apartment. However, you remain the sole user of the apartment. Therefore, from now on, you pay a monthly usage fee, quasi “rent” for the part of your condominium that no longer belongs to you.

Depending on the provider, this usage fee is approximately ~ 3% p.a. (per year). A simple, quick calculation of the usage fee.

• Usage fee (ETW): 3% p.a.

Formula usage fee (depending on the provider) per month:

• Monthly usage fee = 3% * purchase price (share) / 12
• = 3% * 100.000 / 12

With this you pay 250 euros per month.

User fee at 100.000 Euro = 250 Euro / month

As always, depending on the provider. All providers can be found here in the partial purchase apartment: comparison.

This is how the financial company refinances itself.

Disadvantage? User fee vs. credit

Uncomplicated and fast money for the condo, this is a really tempting offer. That is why you should take a second look at the various partial purchase offers for apartment.

Those who resort to the really simple sales offer, quickly get money. But for this, you pay – as learned – the monthly user fee. Many use the offer because you think, I can not get a real estate loan, especially at an older age.

At the same time, a real estate loan is much cheaper! Especially at the current interest rates. Currently you pay here only 1% p.a., instead of 3% or more, as with the partial sale.

Comparison partial sale / credit:

• Partial sale / month = 250 euros
• Mortgage loan / month = 85 euros

So remember, simply put:

Real estate loans are (currently) 66% cheaper!

So it’s worth talking to your local bank and maybe 2 or 3 alternatives.

Partial sale of real estate: advantages, disadvantages, tax & Co.

Read more about partial sale here – A look at costs of use, advantages, disadvantages, the total sale, the calculated increase in value under inflation and a comparison, what is “cheaper”: partial purchase or the alternative real estate loan, more specifically the mortgage loan? In addition taxes, sale from community of heirs, divorce and much more. My recommendations for sellers!

• Partial sale property
• Partial sale provider comparison

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• Real estate: wealth accumulation despite inflation

Real estate as an investment or savings account & Co.

Not only is the property itself considered a secure protection against inflation, but this also has a positive effect on the financing. The assumption that you have to save money in order to build up assets is therefore not entirely correct. On the contrary, if you invest conscientiously, inflation can actually play right into your hands.

Traditional investments in the face of inflation

Let’s take the classic savings book as an example. Here, you regularly deposit money to save it. Whether it’s for your pension, future investments, travel plans or the education of your children. If you have paid in 10,000 euros, for example, that sounds good at first. But what happens in the event of inflation? The money is devalued. Product prices rise. Life becomes more expensive. The 10,000 euros still remain in your savings account, but they are now worth less.

Savings account – If you had put the 10,000 in a savings account, you would still have 10,000.

The savings book as a classic investment may be safe, but you will actually lose capital in the event of inflation. Even the well-intentioned interest from the bank no longer makes much difference. The situation is completely different with real estate as a capital investment.

Invest in real estate: Advantages

Even in times of crisis, real estate is considered a safe investment. Its value is stable in the face of inflation, and even your loan can be positively affected by a depreciation in value. You can sell your property later for twice its value. If you have invested in an increase in the value of your property, for example through renovation and refurbishment, you can increase the selling price of your house or apartment even more!

Property – If you had bought a property for 10,000, in the example, you would later sell it for 20,000.

So here is a sample calculation:

• Buy property (today): 65,000 euros (~15% equity = your 10,000)
• Sell property (later): 130,000 euros

Loans: Fast and efficient repayment

With inflation, money is devalued. The value of your property increases steadily. With regard to financing, things are now getting exciting:

What happens to your loan?

So let’s stay with the example of the 10,000 euros. If you have taken out the loan today, it will still be 10,000 euros later. After all, we now know: The amount of money always remains the same.

Let us now assume that you have rented out your property in order to generate passive income. Due to inflation, you now receive more rent and continue to pay your installments:

• 2020 = 350 Euro rent / repayment 300 Euro
• 2035 = 460 Euro rent / repayment 300 Euro

Conclusion: Minimizing inflation risk

So you see: In contrast to traditional financial investments, real estate offers you some advantages that savings books, Riester pensions & Co. simply cannot promise. While your invested money loses value there, you can generate even more money with real estate as an investment in times of crisis. Your loan will also be repaid more quickly, especially if your rental income increases.

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Becoming a trainer: Fields of activity and preparation for the exam

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• AEVO 1 – Check training requirements
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• AEVO 3 – Train skilled workers
• AEVO 4 – Completing training
• Presentation – example and concept

AEVO Questions 3 – Training skilled workers

What’s at issue?

• Conditions conducive to learning
• Probationary period
• Learning and work tasks
• Training methods
• Learning difficulties
• Social and personal development
• Determine and evaluate performance

Methods

What training methods do you know?

• Four-step method
• Interrogative method
• Modified question-answering method
• Role play method
• Guidance text method

How do you promote independent thinking and action?

The project method and the guideline text method are particularly suitable for learning independent planning, implementation, control and evaluation.

• Project method and lead text method
• Learning of independent planning, execution, control and evaluation

How can you promote brain-based learning?

The following methods help trainees learn content in a brain-friendly way:

• Examples
• Compare
• Picking up where we left off
• Visualization of contents (e.g. with mind maps)
• Emotionalisation of learning content
• Mnemonics

What does four-step method mean?

The teaching of all contents then takes place through a certain method, e.g. the four-step method.

1. Preparing the trainee – in terms of content and methodology
2. Demonstration of the work action and explanation
3. Imitation by trainee
4. Independent work

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Now in the Masterclass: AEVO 3 – Training specialists

AEVO questions: All fields of activity

All fields of activity of the instructor examination at a glance:

• AEVO 1 – Check training requirements
• AEVO 2 – Preparing training
• AEVO 3 – Train skilled workers
• AEVO 4 – Completing training
• Presentation – example and concept

Overview of senior apartments

• Accessibility and good accessibility
• Increasing demand
• Housing entitlement certificate for assumption of costs
• Senior housing, multi-generation houses, senior shared flats & assisted living
• In English – “senior apartment”

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