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Selling an apartment
Buying or selling an apartment in the Principality of Monaco often requires a guided decision. In most of the cases, it is important to work with the right real-estate partner who is more client-oriented rather than transaction-oriented.
Unfortunately, in Monaco some agencies focus only on their bonuses and forget the best and long-term interests of their own clients. It happened to my friend who bought an apartment in Monaco. The transaction driven real-estate agency forgot to tell him that from the next year on there would be construction next door. It brought loud noises, destroyed the view and also will decreased the future value of the property. Ouch… Yes, it was the fault of my friend because he did not do his homework properly. When you make your decision to invest into a multi-million Euro apartment, do not rely on one source only and learn from others’ mistake. Convert it to your advantage.
By working with a good partner, you can easily identify and estimate the market value of your property, which is not always equal to the emotional value that you might prefer to obtain. I believe that a good real-estate partner who really represents you is able to negotiate the best possible conditions for you and your budget, which will definitely respond to the demand of the current market.
The real-estate agencies in Monaco usually work for an average of 3% intermediary fee from the buyer and a further 5% from the seller. When you enter into a business relationship with an agency make sure that you phrase the intermediary fee as a success fee. The wording could be important for you.
In some cases when a buyer or a seller steps back and he/she refuses to sign the final contract, the agencies will still ask for their intermediary fees. This means that it might happen that you get nothing valuable and you are still obliged to pay a serious amount without any exchange.
In any contract, it is important to see clearly when the real-estate agency is entitled to a fee.
Once a friend of mine had an interesting experience from a different angle when he tried to sell his own apartment through a local real-estate agent. The agency successfully found him a person who was interested to purchase the property. They signed the contract whereby the buyer ensured a ten percent deposit payment and the buyer aimed to find a financing solution for the rest of the balance during a mutually agreed timeframe. Unfortunately, the buyer could not manage the financing, and therefore the deal was terminated. The interesting part was that even if the agency could not close the deal, or provide the right buyer for my friend, they were ready to charge the three percent fee from the total price of the property.
Therefore, whether you buy or sell real-estate in the Principality, it is always good to agree on the success fee. And by definition, success fee means that the real-estate agency provides a prospect and closes the deal. The importance is on the closing; do not pay for intentions or unclosed deals. A real-estate deal should be considered closed when the beneficiary has received the full exchange for his/her property.
Tips for sellers
Selling a property might sound easy compared to purchasing one, but still it is a much more detailed process than just hiring a real-estate agent. Selling real-estate involves a kind of marketing process where many things depend on how you are able to present your property to the prospective buyers.
In most cases a prospective buyer has many decision criteria. Even if your property is located in the perfect spot in Monaco, you still have to be sure that you or the real-estate agency utilises all its potential.
You need to identify the best visiting hours for the exposure with the optimum lighting. You also have to consider the timing from the point of view of the traffic and the possible disturbing noises. It is always important to let the real-estate agency know about the preferred timings.
Obviously be sure that when the exposure happens, the property is in the best possible condition. By this, meaning it will be clean and freshly ventilated.
It could be considered a major selling point if your property is empty. By overwhelming an apartment with furniture, artwork and various decorations, you can limit the imagination of the prospective buyer. People love to identify their own personalities in a new living space they are aiming to purchase.
Therefore, it is not considered helpful if your apartment is still rented out and used by someone you cannot influence. Usually it is very difficult to showcase these types of apartment.
Furthermore, for a successful sale be sure you have the following documents:
- Certificate of ownership
- Floor plan of the apartment
- Proof of annual charges
- Proof of previous or future renovations
By having these basic documents, you can support the activity of the real-estate agency which is your mutual interest.
But selling an apartment and finding the prospective buyer does not mean that the job is done. Unfortunately, it can happen that a buyer is not able to provide the full selling price after the agreed deadline. Therefore, your legal protection can be a very important priority.
It can happen that a buyer fails in the total payment and he/she writes to the three notaries of Monaco to block the situation pretending in bad face to be a victim of some bad misleading. Various excuses could come up in order to get back his/her down payment, and they can try all kinds of possibilities for contestation. Cases usually follow in court.
As regulated and easy it seems, the selling process does not always go in order to the expectations. In many cases there are people who purchase or deposit a property in order to quickly resell it for an increased price, and to gain some extra profit. It is a type of investment gambling. These types of speculations often lead to the failure of the final payment after the agreed period, which is usually six months, but often can go up to a year with high-value properties.
When you sign a deal, do not rely only on the real-estate agency, dare to ask for legal advice from any Avocats-Défenseur in the Principality of Monaco. They can secure and care for your best interest and in case of suspicious events, they have all the legal power to block someone from selling the real-estate or to make any further benefit from it.
Be aware of real-estate gamblers
Whether you buy or sell a property in the Principality of Monaco, you must be very careful with the “commitments”. If you do not clearly define when the real estate agency is entitled for its fee, you can face some very unpleasant surprises.
There are foreigners just like in any other city in the world doing investment gambling in Monaco. It typically happens when you list your property for sale and someone shows an interest.
For example, they are ready to place a deposit on the property (generally, this is when the real estate agencies immediately take their 3% fees on the total selling price). However, the supposed buyer may not have a great interest to buy the apartment because he or she is a real estate gambler, whereby they aim to resell the booked and deposited apartment within the allowed 6 months’ timeframe, which is their legal right; there is nothing against this in the Monégasque law.
However, if a new buyer has not been engaged in the 6 months, you can be faced with the situation that they ask you for the refund of the deposit. This means you not only have lost a buyer and over 6 months of selling time, but you also paid 3% for your real estate agent for nothing.
You may also face a similar situation when the buyer is not financially able to afford the property. The buyer will aim to find a financing solution for the rest of the balance during the mutually agreed timeframe. Unfortunately, if the buyer cannot manage the financing you might have already paid your success fee to your real estate agent for the unsuccessful deal.
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