how best to sell?

Questions about selling property
Post Reply
madmax
Posts: 6
Joined: 24 Jan 2008 23:13

how best to sell?

Post by madmax »

Hi Nigel, first time on the site and very impressed with the amount of useful information available.We bought a two bed appt in chloraka near paphos approx 5yrs ago and are now looking to sell (no title deeds as of yet).We approached the developers as this seemed the easiest option as we sadly spend most of our time in the Uk.They asked us what we would like to receive as a net amount when appt sells and then proceeded to add another cyp£14000 on top of the net price for expenses,transfer fees etc.Is this normal practice as similar properties for sale are around the net price we stated.Are there huge hidden costs on top of the asking prices of property for sale? Are we likely to be better off using an independent estate agent, as how can the property possibly sell at this inflated asking price.Any advice as to how best to sell our property (and who with :? ) would be greatly appreciated kind regards Madmax
Nigel Howarth
Site Admin
Posts: 2911
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: how best to sell?

Post by Nigel Howarth »

Hi Madmax & welcome,

Regrettably as you are not considered to be the property's legal owner and therefore, you cannot sell it without the agreement of its legal owner (i.e. the person in whose name the Title Deed is registered - in your case, the developer). It'll make no difference if you sell your apartment using a registered estate agent, you'll still need to come to a financial agreement with the developer to release you from the contract.

This agreement involves him allowing you to cancel your contract of sale, thereby enabling him to enter into a new contract of sale with your buyer. Alternatively, the agreement will allow you to transfer your present contract to your buyer.

When you bought the apartment, your lawyer should have included a "right to sell" clause, which will look something like the following:

  • “If at any time after the signing of the present agreement the Purchasers desires to sell the said Property, they will have an absolute right in doing so as they are deemed to be the beneficial owners of the Property providing that the Purchasers have fulfilled all their obligations as herein provided. The Vendors shall be obliged and cannot in any way object to and /or deny and/or withhold their consent to sign any necessary cancellation contract and new contract of sale with the new purchaser/s, provided that the vendors shall not be liable for any taxes and/or other related expenses as a result of such transaction.”


But if you used the 'free' legal services offered by the developer, it's very unlikely that your contract will contain such a clause. And as a consequence, the developer can charge whatever he feels appropriate to allow you to sell the apartment. Decent developers charge a reasonable amount, but others, like yours, charge like wounded bulls!

If you had the Title Deeds and sold the apartment, the costs you'd be looking to pay would be:
  • Estate agents fees - 3% to 5%
    Capital Gains Tax - 20% (less allowable expenses - see the Capital Gains Tax page on my website)
    Legal fees - a few hundred pounds
I suggest you read though your contract of sale and see if it has a "right to sell clause" mentioned above. If not, it's probably worthwhile waiting until you get the Title Deeds before selling - you may be able to get some income in the meantime by renting it out - but don't expect to make a fortune. You'll have to pay the Property Transfer Fees, but at least you'll not have to pay the developer CYP 14,000 to sell it!!

As you're probably aware, there's more property looking for buyers than buyers at the moment. If you must sell it now, you'd need to price it competitively.

Regards,
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news
Post Reply