A Guide To Selling Your Property In Hong Kong
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Introduction
The process of selling your property in Hong Kong is discussed in this article.
One of the cities with the highest population density is Hong Kong. Real estate developers typically construct multi-story structures that are between 30 and 70 stories high when there is very limited accessible land.
Nearly the majority of Hong Kong’s land is held under leasehold tenure for historical reasons. The government has leased or granted property over the years to people or businesses for usage or development.
Therefore, in Hong Kong, the sale and purchase of landed property constitutes the transfer or assignment of a lease. In a sale and purchase agreement, both the legal estate and the equitable interest in and in the landed property are agreed to be sold by the vendor and purchased by the buyer, respectively.
3 Easy Steps for Selling Your Property in Hong Kong
1. List your property for sale.
Property owners have a variety of options for promoting the sale of a property. The most straightforward method is through a real estate agent, who will enter the property into a database that is accessible to all agents in Hong Kong.
In exchange for an upfront commission that is negotiable but often equal to one percent of the property’s worth, the agent will manage the negotiations and the sale. When showing the home to prospective purchasers, the owner has the option of giving the agent a set of keys.
Additionally, there are property listing pages in several publications, websites, and newspapers. In these circumstances, the owner will not be required to pay an agent’s commission but will be required to be present whenever a prospective buyer requests to view the property.
2. Accept a price offer.
The seller should acquire a signed copy of a binding provisional agreement attesting to the buyer’s pledge to acquire the property, as well as the price and any other essential data when a price has been agreed upon and all aspects of the transaction have been addressed.
The buyer will then provide a non-refundable deposit. Following that, a Sale and Purchase Agreement will be prepared and submitted for approval. It is smart for the seller to get a lawyer to review this agreement and make sure that all terms are correctly agreed upon and that the seller’s interests are safeguarded.
Before the final contract is signed, the buyer and seller should meet on-site to discuss all items that will be included in the sale as well as the date for the sale’s completion and the property’s transfer. Of course, if there are already renters living there, a visit may not be allowed, but the contract must contain provisions addressing the tenants.
3. Settle taxes, fees, and other charges.
The Inland Revenue Department states that any gains made in Hong Kong from the sale of real estate are subject to profits tax and must be reported to the government.
10 Tips You Need to Know Before Selling Your Property in Hong Kong
1. Know your local market circumstances well.
Do you intend to sell in a seller’s or a buyer’s market? This might have a significant impact on how lucrative your property sale is. Although there may be more considerations, such as location and unit condition, being aware of the kind of market you’re in will greatly aid in directing you.
Days on Market (DOM) is a useful tool for figuring out if you’re in a buyer’s or seller’s market. Look at comparable homes that are for sale. You can be sure that customers are actively trying to buy if they are selling more quickly than the usual DOM. Comparative appreciation is another crucial statistic to take into consideration.
It’s a very solid indication that you can sell your home for a higher price if apartments that are comparable to yours are seeing an increase in price. Keep in mind these important points when you start bargaining with a prospective buyer.
2. Timing is important.
People frequently keep seasonal aspects in mind when they are looking for a new property to purchase. For instance, late Spring is sometimes a sought-after period for selling a property, particularly to a family with children, since it permits the arranging of the move to occur just as the children are leaving for their summer break, which helps minimize family disturbances.
To ensure that a sale would cover your existing mortgage and net you a profit, you need also take time into account when determining how much equity you have in your property.
3. Keeping prices reasonable and according to the current market.
Naturally, you will most likely need to lower your asking price if you list your property for an excessively high or inappropriate price. It might ultimately result in a lengthier selling time and have an impact on how easy buyers can locate your listing.
According to conventional wisdom, when buyers notice a consistent reduction in the stated price, they will become less optimistic about a certain property. It raises the possibility that the property’s circumstances are questionable.
Because the owner could be anticipating even another reduction, this circumstance might reduce your negotiation strength.
4. Who will be in charge of the sale?
While some people may choose to work with a licensed professional real estate agent, working directly with a potential buyer to negotiate and complete a transaction is the most typical and maybe most efficient option.
In Hong Kong, there is no shortage of agent businesses with skilled personnel who can assist you through all the most recent updates to processes and rules so you can avoid any hazards.
Additionally, brokers have a database of keen purchasers that are willing and active, which makes it simpler to sell your property.
Additionally, the biggest real estate agencies in Hong Kong now have their own unique applications for computers and smartphones. This is a really useful tool for buyers (and sellers) to view your property and determine whether they want to buy it.
5. Greater revenues could result from a small improvement.
Regarding property improvements made before a sale, there is no hard and fast rule. The effects of a re-modelling project will mostly rely on the state of the market and the actual worth of your existing property.
In more costly homes, adding a good pool or installing high-quality wood flooring will often provide better profitability, but re-modelling a kitchen or adding a new bathroom would typically yield greater profits in less expensive homes.
6. Understand the true cost of selling a property.
When selling your property in Hong Kong, there are other ancillary expenditures to consider. Closing expenses, government-related charges like as stamp duties, as well as potential solicitor’s fees and other expenditures, are all included.
Of course, if you completed the transaction through a real estate agency, you will be required to pay a commission of up to 1% of the sale price.
7. What to do after you’ve accepted a price offer.
Once you and a prospective buyer have reached an understanding of the specifics of the property sale, be careful to draft a sale and purchase agreement for approval. With this phase of the process, your real estate agent may also be helpful.
In some circumstances, you might wish to retain the services of an attorney to review the contract to make sure that all the terms are properly incorporated and your interests are effectively safeguarded.
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