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Old 21.06.2013, 15:17
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Sell property on mortgage

I tried looking for this but no easy way to find the answer. The question being - has anyone had an experience of selling a property or apartment that has a mortgage on it ? How does it work ? Is the mortgage transferred to the new buyer ? Are there any penalty or fees for this ?
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Old 21.06.2013, 15:19
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Re: Sell property on mortgage

You sell the property and pay off the mortgage. Hopefully there something on top that you keep!
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Old 21.06.2013, 15:22
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Re: Sell property on mortgage

It's very normal. You can transfer the mortgage on to the buyer (I think this avoids fees) or you can settle your mortgage (this may attract fees).

The buyer's bank will transfer the purchase amount to your bank and you'll get any remainder.

If there is a profit made, your local taxman will be writing to you so ensure you have lots of receipts for work done on the house over and above the annually-permissible amount you can levy on your normal tax return.
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Old 21.06.2013, 15:25
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Re: Sell property on mortgage

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I tried looking for this but no easy way to find the answer. The question being - has anyone had an experience of selling a property or apartment that has a mortgage on it ? How does it work ? Is the mortgage transferred to the new buyer ? Are there any penalty or fees for this ?
You pay off the mortgage, plus any early repayment penalties (check your documentation). The buyer will want evidence that cancellation has been agreed and the mortgage been paid - if it is paid off with buyer's funds, the mortgage documents and/or the purchase price (or at least the portion that will pay off the mortgage) will be held in escrow by the bank, a lawyer or the notary, depending on which canton the property is in.
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Old 21.06.2013, 15:28
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Re: Sell property on mortgage

As GG says, you usually pay off the mortgage from the proceedings of the sale.

I've run across a few sellers who wanted the buyer to take over their mortgage, though. To me this is a huge negative, and I've walked away from properties I otherwise might have bought because the seller insisted on this point.

Given today's low rates there are few older mortgages out there that would be to a buyer's advantage to take over.

And... to me, a seller asking for a mortgage takeover is signalling desperation. When I see that I start sharpening my negotiating pencil.

Why make the deal more complicated than it needs to be? As a buyer, simplicity is a selling point.


(Bear in mind not all buyers think like I do. )
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Old 21.06.2013, 15:35
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Re: Sell property on mortgage

Sold my house in March.
I tried to transfer it, but the other person did not want to do this as the interest rates were higher than currently available ones.

160K was on a 8 year fixed, the rest (180K) on a 5 year fixed.

I got hammered for 27K in penalties - 4 years left on the 8 year part and one year on the 5 year part.

Just doing the Gewinsteuer - capital gains - and I am praying this can be deducted.

Be careful what you sign - I was given bad advice regarding the 8 year fixed mortgage - I would have been better waiting 3 or 4 years before seling the house (but had no choice due to health issues)

Basically, it seems that you should sell the house in the last year of the fixed mortgage to keep the penalty down to the minimum.

I will know better next time (probably never buy in CH again)

Be warned.

Also if you buy a house within 2 years, you can defer the Gewinsteuer.

Last edited by jbrady; 21.06.2013 at 17:03.
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Old 21.06.2013, 15:44
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Re: Sell property on mortgage

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Also if you buy a house within 2 years, you can defer the Gewinsteuer.
I believe this requires the next property to be the same or higher in price?
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Old 21.06.2013, 16:01
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Re: Sell property on mortgage

This is true.
First time I have done this - so I will update this thread once I have spoken with my accountant.

We have just found a small apartment in the same village for about 300 K - about half the price of what we received from the sale. Perhaps it works on percentages - maybe half price is half the Gewinsteuer?

Anyone else know how this is calculated?

Last edited by jbrady; 21.06.2013 at 16:02. Reason: spelling
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Old 21.06.2013, 16:46
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Re: Sell property on mortgage

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You sell the property and pay off the mortgage. Hopefully there something on top that you keep!
But can you sell a property that you still dont fully own (as it has a mortgage on it) ?
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Old 21.06.2013, 17:01
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Re: Sell property on mortgage

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But can you sell a property that you still dont fully own (as it has a mortgage on it) ?
i also tend to doze off when people talk about mortgages, but the answer is yup.
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Old 21.06.2013, 17:15
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Re: Sell property on mortgage

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This is true.
First time I have done this - so I will update this thread once I have spoken with my accountant.

We have just found a small apartment in the same village for about 300 K - about half the price of what we received from the sale. Perhaps it works on percentages - maybe half price is half the Gewinsteuer?

Anyone else know how this is calculated?
i can't speak for switzerland specifically, but a typical deferral scheme is that the gain is rolled over into the new asset.

for example, if you bought for 600 and sold for 800, you have a gain of 200.

when you buy your new place, you pay 300, and roll your gain into it so that your deemed cost is (300-200) = 100.

when you sell your place in the future for 400, you gain is calculated at 400-100 = 300 of gain.

Last edited by Phil_MCR; 21.06.2013 at 20:13.
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Old 21.06.2013, 17:22
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Re: Sell property on mortgage

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But can you sell a property that you still dont fully own (as it has a mortgage on it) ?
yes of course. Most people rarely clear their mortgage in Switzerland in order to avoid tax.

You do not have to pay off the mortgage before selling it but the banks will deal with each other and not you.
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Old 21.06.2013, 19:26
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Re: Sell property on mortgage

In Switzerland it is an easy matter to take your mortgage with you to put in your next property. You must tell your lender and get their approval of course. We did this quite painlessly and with minimal cost.
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Old 21.06.2013, 19:41
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Re: Sell property on mortgage

The legal costs of setting up a mortgage are several percent of the mortgaged sum, the document written to 'bearer' is actually valuable & should not be cancelled even if the mortgage is paid off.

If you take over some else's fixed deal, there should be a payment to you if the rates are above what's available in the market, or possibly a premium payable in the future when rates rise. A fixed deal is not sold at Par value & can be accurately valued or 'swopped'
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Old 18.08.2016, 21:18
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Re: Sell property on mortgage

Hi all,

I know this is an ancient thread but it is along the lines of what we need info on....

When selling a property, what costs are carried by the seller (over and above the commission for the estate agent)?

i.e what will it cost us to sell?

Any input appreciated
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Old 18.08.2016, 22:33
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Re: Sell property on mortgage

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Hi all,

I know this is an ancient thread but it is along the lines of what we need info on....

When selling a property, what costs are carried by the seller (over and above the commission for the estate agent)?

i.e what will it cost us to sell?

Any input appreciated
Whatever it costs you to end your mortgage; ask your bank for exact quote
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Old 19.08.2016, 02:13
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Re: Sell property on mortgage

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Hi all,

I know this is an ancient thread but it is along the lines of what we need info on....

When selling a property, what costs are carried by the seller (over and above the commission for the estate agent)?

i.e what will it cost us to sell?

Any input appreciated
If you sell the property privately, there are obviously no selling fees paid to a third party. However, you may incur other costs such as a fee for an appraisal, (for example by the HEV), advertising costs, notary fees and possibly bank charges related to your mortgage. The latter will depend on the type of mortgage and the conditions.

There are some agencies selling properties who do not charge the seller a fee. They claim to build this into the selling price.
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