25 Tips

DEAR HOMEOWNER! Decided to sell a property? Then you’ve come to the right place! OTTO Immobilien has been a successful estate agency for over 60 years. During that time, we have acquired considerable na tional and international expertise and it is our pri vilege to share that knowledge with you. In our new 25 Tips guide to selling your pro perty, we offer a clear and concise overview of our wealth of experience. In addition, we would be more than happy to give you advice in person. Our property sales specialists will view your house or apartment, prepare the data, professionally value your property and suggest advertising options, tailor an advertising package to your needs, and support you all the way to the moment you hand over the keys. Success is our main priority! If you have any questions, my team and I are always available. We look forward to meeting you! Kind regards, Dr Eugen Otto and the OTTO Immobilien Team +43 1 512 77 77 otto.at/en

1 2 DEFINE YOUR SALES TARGET It only makes sense to sell your property if it no longer suits your personal circumstances – because it has become too small or too big, or because your new workplace is too far away. Once you have made your decision, you should define your own sales target. In addition to the asking price, consider when you will need the money, what the price should include and whether it is important to you to know the pro perty is in good hands. THE RIGHT ESTATE AGENCY A good way to start looking for the right es tate agency is by looking at their website. There you will see whether your property is similar to the others they are advertising. Ask the estate agency how many properties they have sold, how long the company has been in business and how large their national – and interna tional – network is. Make sure that the chemistry is right – because selling property can be very emotional. ! Appointing a sole agent or multiple agents If you appoint a sole agent, you are committed to not offering the property to any other esta te agent. This exclusivity obliges the es tate agent to take demonstrable action – such as advertising the property. When selling a pro perty, a sole agent can only be appointed for a maximum of six months. office@otto.at

3 ADVERTISING OPTIONS: ‘CREATIVE BEATS STANDARD’ Good estate agencies know lots of ways to find the right buyer. Depending on the target group, that will include highly professional print and online ads, social media activities and attending housing fairs. To show your pro perty in its best light, an estate agent will com mission a professional photographer, perhaps have a video made or a 360° tour of the proper ty filmed, send out property descriptions and then attend viewings with prospective buyers. Good estate agencies will discreetly tap into their pool of potential buyers and if desired also advertise your property abroad via their international network. For example, OTTO Immobilien is the exclusive Austrian partner of Knight Frank, the largest private real es tate consultants in the world with 500 offices in 60 countries. Realistic timeframe Apartments in and around Vienna that are valued at a standard market price are current ly sold within three to six months. THE ESTATE AGENT CONTRACT A good estate agent will inform you of all costs up front. Furthermore, they are under obliga tion to declare any relationship to the buyer or seller and/or their role as a dual agent, mean ing an estate agent working for both parties. In turn, by signing a sole agent contract (see tip 2) you are under obligation not to offer or sell your property to others and to pay the ! 4 +43 1 512 77 77 otto.at/en

5 estate agent fee after a successful sale. In their contract the estate agent will list the advertising services they will provide in return for this fee. CHECKLIST: THE NECESSARY DOCUMENTS To sell your property, you need:  Land Register deeds  Title deed  Specifications and plans  Floor plans and sections  Minutes of the last three meetings of apartment owners  Annual statement for service charges  Current notice of service charges  Energy Performance Certificate for the building or apartment  Receipts for refurbishments and maintenance work ! What is an Energy Performance Certificate? It provides information about energy use and consequently about the expected fuel bill. The rating ranges from A++ to G. When selling an apartment, an Energy Performance Certifi cate for the entire building is sufficient. 6 ORGANISING MISSING DOCUMENTS With the necessary authorisation, your es tate agent can find and compile missing docu ments – this service is included in the estate agent fee. office@otto.at

7 8 THE LAND REGISTER In the Land Register anyone can see who a property belongs to. And whether there are any encumbrances on the property, for ex ample if the bank is listed as the creditor in the Land Register. Furthermore, any resale bans or another party’s right of preemption are also recorded in the Land Register. THAT’S ABOUT THE SIZE OF IT If you want to ascertain the size of your pro perty, it’s first necessary to differentiate bet ween some technical terms. When calculating the area, that means the usable floor area ver sus the gross internal and external area. The usable floor area means all the square metres inside the property – and unlike in previous regulations, that now includes the floor area under low sloping ceilings. The gross internal and external area additionally includes other spaces such as any terraces, cellars or garages. Contrary to calculating area, some deductions have to be made when pricing according to size. To a certain degree, they are discretionary, which is why it is important to ask an experi enced estate agent for advice. Depending on a terrace’s location and its size proportionate to the total area, for example, only a third or half of its area is relevant. The estate agent also won’t calculate the floor area under low sloping ceilings at the customary market price per square metre if it is not or barely possible to stand upright under them. +43 1 512 77 77 otto.at/en

9 BEWARE OF NON-PARTITIONED APARTMENTS Check whether your apartment building has been partitioned, i.e. whether you own the apartment or are only a coowner of the en tire building. Things that you barely notice in your everyday life can become a hurdle when you’re trying to sell. In the utilisable value report, partition stipulates the utilisa ble values of the individual apartments and is a prerequisite for drawing up title deeds and Land Register entries. ! What is home ownership? Home ownership is the right to exclusive use and ownership of a property. In other words, to live in it, sell it or rent it. In contrast to a simple coowner, a homeowner has the indivis ible right to exclusive use of a specific apartment in a property, and this right is also enter ed into the Land Register. 10 WHEN TO MOVE OUT In good and excellent locations, a vacant pro perty will fetch a better selling price than one that is still being inhabited or rented. Which is why it can definitely be an advantage to move out early or to offer existing tenants a finan cial incentive to move out. office@otto.at

11 FAIR MARKET PRICE One of the most important things when sel ling your property is to determine its fair market price. The most significant factor is always its location, including its dis tance from public transport, shops and restaurants. Other criteria include open spaces, which storey it is on, which way it faces, its floor plan, how light it is, its fittings, its age and when it was last renovated. Points are ad ded for attractive façades, entrances and architecture – and detracted for all kinds of pollution, from noise to offensive odours. When calculating the right price, it is helpful to keep an eye on house price trends and the housing market in your neighbourhood. The internet knows the average price, but a good estate agent knows the maximum price. You can find a summary by going to www.otto.at/en and clicking on ‘Market Re ports’ in the menu. 12 THE ESTATE AGENT FEE The estate agent fee is conditional and is bas ed on the value of your property. The amount that can be charged is regulated by law. It can not be any higher than 3% – plus 20% VAT – of a selling price that is above €48,448.51. With cheaper properties, the fee can be a maximum of 4.8% including VAT. +43 1 512 77 77 otto.at/en

13 ADDITIONAL COSTS As the seller, you don’t need to worry too much about additional costs as most are borne by the buyer. These include the costs for drawing up the contract, the real estate transfer tax, no tary fees and Land Register entry fees. As the seller, you are solely responsible for having any mortgages in the Land Register cancelled, the cost of which is based on the amount of money owed. Besides attestation fees, the bank does not charge for the cancellation deed, but the notary or lawyer tasked with cancelling the entry in the Land Register may charge a fee. Some real estate sales are subject to capital gains tax (see tip 19). 14 PREPARING FOR THE SALE An empty property always makes the best im pression. But don’t turn off the electricity! It’s not easy to sell a cold and dark property. If you are still living in your home, it is obviously most important for it to be tidy, clean, well aired and have clean windows. In addition, it is helpful for potential buyers to be able to imagine them selves living there, so the fewer personal items the better. Which is why it is best to tidy away family photos and souvenirs and remove your children’s artworks from the fridge. If there is a balcony or terrace, the rule of thumb is: empty is better than plants that are dead or dying. office@otto.at

15 THE VIEWINGS Rule number one for viewings is: make sure you’re not at home! No one makes an estate agent’s job more difficult at a viewing than the current owner. After all, hardly anyone can re main calm and casual while strangers are dis cussing what they would change about your home. The most important thing is to make sure everything is easily accessible for the estate agent and prospective buyers – so make sure they have the keys to the cellar compartment and the bike and buggy room. ! Which renovations are sensible pre-sale To keep it short: almost none. The likelihood that you will cater to the taste of the next own er is slim to none. 16 RECEIVING AND ACCEPTING AN OFFER If your property has made a good impression, you will receive a purchase offer. It is essen tial that this include the address and size of the property, the buyer and seller’s personal data and the purchase price. A good estate agent will supply the corresponding forms and ensure the correct wording, such as that the property will be handed over ‘as viewed and unencumbered’. It is also important to state in writing until which date the offer is valid – the offer is binding for the buyer, not the seller. +43 1 512 77 77 otto.at/en

17 DRAWING UP THE CONTRACT Once you have decided to accept an offer, you and the buyer will exchange contracts. This takes place at the office of a notary or lawyer usually chosen by the buyer, because it is the buyer who pays the costs for drawing up the contract and holding the funds in escrow. Have your own lawyer look over the contract – especially the small print (see tip 18). 18 THE SMALL PRINT To avoid any nasty surprises, make sure that every last detail has been considered in the conveyancing contract. In particular, you should exclude any liability for the building’s condition and reinforce this with an expres sion like ‘as viewed’. If you still have warranty claims with third parties – for example the property developer because less than three years have passed since you completed on the property – then you should transfer these to the buyer before completion. On top of this, define the condition in which the property should be handed over: empty, swept or freshly painted? Completion should only take place once the purchase price has been registered in the trust account. office@otto.at

19 THE FINANCIAL TRANSACTION It is customary to use an escrow account for payment purposes. This is the only way to guar antee that there will be no unpleasant surprises. The new owner should only be ent ered in the Land Register once the purchase price has been received. As soon as the buyer is entered in the Land Register and all condi tions have been met, the notary or lawyer will transfer the paid purchase price to an account of your choice – minus any unpaid loan, which will be transferred straight to the bank. Capital gains tax on real estate Since 1st April 2012 all capital gains arising from the sale of property are subject to in come tax. The tax rate amounts to 30% of the capital gains. If the property was purchased before 31st March 2002, it is possible to apply capital gains tax for real estate at a flat rate of 4.2% of the purchase price. Exception: if the property served as your primary residence for the past two years or for five of the last ten years, then the sale is taxexempt. ! 20 THE FINAL COSTS However, just because the purchase price has been paid does not mean the financial aspect is over and done with. Only much later will you receive the annual statement for service charges or electricity and heating with a nega +43 1 512 77 77 otto.at/en

tive or even credit balance. To avoid disputes, a good estate agent will draw your attention to this and advise you to stipulate who will receive any credit or be responsible for any negative balance that may arise 21 CAUTION WHEN SELLING INHERITED PROPERTY If you inherit property, you may also be in heriting associated debts, mortgages, or bank loans! For this reason, you always have the option not to accept the inheritance. If you do accept and want to sell the inherited pro perty, you must first wait for the devolution with which the estate is legally transferred to your name. At this point you are liable to re al estate transfer tax in the amount of 3.5% (depending on the property value, there are lower rates of taxation of 0.5 to 2% when inheriting from a family member). It would be necessary to obtain the permission of the probate court prior to a sale, in which case the heir is not required to pay real estate transfer tax. Once a buyer has been found, you as the heir are liable to tax on the cap ital gains from the real estate transaction. In most cases, this is a flat rate of 4.2% of the purchase price. Only sales of properties purchased after 31st March 2002 are subject to 30% tax on actual capital gains. This sum is deducted by the entrusted lawyer or no tary and transferred to the tax office. There has been no inheritance tax since 2008. office@otto.at

22 THE HANDOVER CHECKLIST Make sure you don’t trip up during these last few steps. You can avoid making any mistakes with this checklist and the advice of a good estate agent:  Make an exact record of which and how many keys you hand over to the new owners. This will avoid any discussions at a later date about whether the key to the refuse room is missing or whether you still have access to the property.  Read the electricity, gas and water meters together with the new owners and make a record of the readings.  Write a short handover protocol to prevent any arguments in the future.  Taking photos is a good idea – especially if an agreement has been made to hand over furniture or make renovations.  Should any damage be identified during the handover that was not previously visible, you should record it well to make certain that a scratch in the parquet is not later portrayed as a ruined wooden floor.  As a rule of thumb, when in doubt it is a good idea to have a neutral witness. Which is why a good estate agent will always take the time to join you for this last step.  Invoices for refurbishments and maintenance work. +43 1 512 77 77 otto.at/en

23 CAUTION ADVISED WITH RETIREMENT INVESTMENT APARTMENTS investment or retirement An investment apartment is a special kind of home owner ship. It is not intended to be a primary resi dence but an investment with the aim of earn ing an income from renting it or from it increasing in value. Your estate agent will tell you the specifics once you intend to sell. 24 RETIREMENT INVESTMENT APARTMENTS: CONDITIONS AND TIME LIMITS As the owner of a retirement investment apartment, you can claim the costs for refur bishments, maintenance and tax advice from the tax office – but only if the property is not sold within 20 years of its purchase. Those who do so (or stop renting out the property) must partially repay the input tax deducted at the point of purchase and for repairs. 25 RETIREMENT INVESTMENT APARTMENTS: THE TENANT If you rent out your investment apartment, your tenants will enjoy the same rights as any other tenant. Which might reduce its price when you want to sell (see tip 10). For this reason, a good estate agent will always advise you to limit your temporary rental contracts to a maximum of five years. office@otto.at

www.otto.at/en Simply good advice. Our experts look forward to hearing from you! Mag. Richard Buxbaum +43 1 512 77 77-300 r.buxbaum@otto.at ■ Head of Residential/Authorised Officer ■ 30 years of experience in the Viennese residential market ■ CÄSAR 2017 (Austria’s best estate agent) Mag. Michaela Orisich +43 1 512 77 77-323 m.orisich@otto.at ■ Head of Otto Prime ■ 25 years of experience in the Viennese residential market; specialised in the luxury sector Sonja Kaspar +43 1 512 77 77-313 s.kaspar@otto.at ■ Head of Otto Boutique ■ 25 years of experience in the Viennese residential market; specialised in apartments and houses for owner occupancy and as (retirement) investment