What costs are incurred when selling a house?

Selling a house: What are the costs?

What costs are incurred when selling a house and how high they are varies from property to property. Many different factors are decisive, such as the structural condition of the property, the mortgage burden, the ownership situation or the time of the sale. Also, the seller does not always necessarily have to bear all the ancillary costs of selling the house. Costs such as the estate agent's commission are usually shared equally, and the notary's fees are usually borne by the buyer. In the following, we will therefore show you which costs are incurred for the sale of a property and whether they have to be borne by the buyer or the seller.

Overview: Incidental costs when selling a house

Not every house sale involves the same costs. However, there are some expenses that almost always occur. Common incidental expenses incurred before or during the sale of a property are:

• Renovation costs

• Costs for obtaining documents

• Early repayment fee

• Taxes

• Estate agent's commission

• Notary fees

What these ancillary costs are all about is explained below:

Renovation costs

No property is free of flaws. Especially properties that have been owned for several years or decades often show signs of age. This can range from the wall paint to the insulation of the walls to the condition of the roof truss. Before selling a house, minor and major repairs can therefore be worthwhile. Because even if these initially cause costs, a property usually achieves a higher sales price if it is free of major defects. Whether modernising the house is economical should, of course, still be decided on an individual basis.

Documents

Numerous documents are necessary for a legally valid house sale. These include, for example, an extract from the land register, the energy certificate or a register of contaminated sites. Applying for these documents may incur additional costs. For example, if the energy certificate has to be newly created, this can cost between 50 and 500 euros - depending on whether a demand or consumption certificate is required. Authorities often charge a fee for other documents as well. However, the lack of these documents can be much more expensive for the house seller than applying for them: for example, a missing energy pass is punishable by a fine of up to 15,000 euros. In our summary, we therefore explain which documents you need for the house sale.

Early repayment fee

If the house is to be sold before the fixed-interest period of the property loan expires, additional costs will be incurred. However, this early repayment fee is only due if the sale takes place before the end of a ten-year period. If the owner sells his property after a 10-year loan period, no early repayment penalty is due. In such a case, according to the law, he can terminate the loan agreement with a notice period of six months and only has to pay the remaining amount and the interest on the due date - but not the extra fee for the early termination of the agreement.

Taxes

Both buyers and owners incur taxes when selling a house. Some of them are obligatory, others can be avoided under certain conditions. For the buyer, for example, land transfer tax is always due. For the seller, the sale of a house may incur costs in the form of income tax, speculation tax or inheritance tax. However, this depends on how long the property has been privately owned and whether it is owner-occupied or, as in the case of a rental, used by a third party. If, for example, the property has been owned and occupied by the owner for more than 10 years, no income tax is due on the sale of the house. In our guide we summarise when owners can sell their house tax-free.

Estate agent's commission

Hiring an estate agent to sell a house also costs money. This so-called broker's commission was handled differently in Germany from state to state until now - in some states, such as Hesse or Berlin, only the buyer paid, while in others both parties shared the broker's fee. in 2020, the federal cabinet voted in favour of a nationwide reform of the brokerage commission, according to which buyers and sellers will share the costs equally in the future. For home sellers, hiring an estate agent is advisable. Thanks to a neutral view of the property to be marketed and years of experience, a competent real estate agent is able to realistically evaluate the property. This often has a positive effect on the final asking price. In addition, he takes care of a representative marketing strategy, organises the viewings and all necessary documents and, last but not least, professionally leads through the negotiations with potential buyers. The final selling price and a significantly reduced effort for the owner are therefore only two of the many reasons in favour of selling a house with an estate agent.

Notary fees

The fee for the notary contract is also one of the unavoidable costs when selling a property. However, these costs of often several thousand euros are usually borne by the buyer. However, it can happen that the seller of the house also has to pay the notary fees. From a legal point of view, both parties to the contract are liable for paying the notary. If, for example, the buyer turns out to be unable to pay, the seller must pay all notary fees. However, since one of the tasks of a real estate agent is to check the buyer's liquidity, owners who sell with the help of an agent are usually on the safe side in this respect.

Who bears the costs when selling a house?

As described above, there are various costs involved in selling a house. Some of these are the responsibility of the seller, others are the responsibility of the buyer. In addition, there are costs such as the estate agent's fee, for which both parties have to pay equally. We have summarised the individual items for buyers and sellers here.

Costs for the seller

The seller often incurs the following costs when selling a house:

• Renovation costs

• Costs for obtaining documents

• Taxes - however, a tax-free sale may be possible under certain circumstances

• Early repayment fee - not applicable under certain circumstances

• Estate agent's commission - since 2020, a maximum of 50% of the total fee

Costs for the buyer

The buyer often incurs the following costs for the house sale:

• Land transfer tax - depending on the federal state, 3.5 - 6.5 % of the purchase price

• Notary fees - usually 1-2 % of the purchase price

• Land register entry

• Estate agent's commission - since 2020 a maximum of 50 % of the total fee

• Modernisation costs

Selling a house without costs

It becomes clear that the sale of a house is not without costs, neither for the buyer nor for the seller. However, many fees, such as tax levies, can be minimised or put into perspective when the associated measures increase the selling price. Our experienced estate agents will be happy to support you in this endeavour and advise you on how to make your sale not only as stress-free as possible, but also economical.