Why should I use the assistance of a broker in selling or buying my property?
A broker is much more informed of the market situation and available property or purchase requests than a person who rarely makes real estate transactions. In addition, a broker provides assistance in negotiations, making appointments with a notary public and performs other acts that need to be performed for the purpose of closing a deal. A broker helps you to save time and money, using their knowledge and database in representing the client’s interests.
What’s the liability of a broker working in a real estate company?
Unlike a realtor who works alone or a fraudster who claims to be a broker, a broker working in a real estate company can use the assistance and advice of the support staff of the company, i.e. the secretary, in-house lawyer, marketing manager, etc. Thus, the broker’s liability is in fact equal to that of the entire company. Companies who have been in business for years are competent and impartial in representing their clients in any and all real estate issues; unethical and unprofessional employees cannot survive in well-known real estate companies for long.
What does the intermediation service cost?
The parties agree on the price of the intermediation service – this is not regulated by legislation in Estonia (yet). The price used in practice is 3-5% of the sales price (including VAT) (the commission is agreed between the seller and the realtor in the course of negotiations and it may differ from the rate specified above), which is paid by the seller; in the case of rent transactions, the usual commission is one month’s rent (plus VAT) paid by the lessor or the lessee as agreed. In the case of business premises the intermediation fee may exceed one month's rent if a long-term contract is involved.
What does the appraisal service cost and what does the price depend on?
Competition on the appraisal market is tough and this is why the prices offered by large agencies are rather similar. You will find the appraisal price list of Arco Vara here. The price of the service may be lower during special offers. The price always depends on the complexity of the appraised object as well as the location of the object.
What should you keep in mind upon purchasing residential real estate?
First, you should think of your needs and the needs of your family today and in the near future as well as your preferences concerning the surroundings, social infrastructure and distance from your workplace, school, etc. Secondly, you should definitely take the public utility expenses into account, i.e. how much you have to pay for the services consumed, maintenance of the building, etc., over the years. Your income and the income of your family and their change over time, i.e. your creditworthiness in general is important, too. The increase in the value of the dwelling over time is kept in mind less often when it comes to the acquisition of a dwelling.
What should you keep in mind upon purchasing commercial real estate?
Commercial real estate is purchased for business operations: for producing something, servicing someone, etc. Therefore it is important to consider if the location and the building as such is suitable for the planned purpose and what do the required modification or construction work costs. An alternative to purchasing is leasing suitable premises, thus releasing the company from the need to tie up its own funds or take a bank loan for purchasing.
What does the value of real estate depend on?
The value of real estate depends on the demand and offer at the given time and in respect of the given object of real estate and one of the most important factors that affects the price of an object of real estate is its location.
What is the net operating income of real estate and how does its change affect the value of the property?
Net operating income is the cash flow that is for the owner to keep after the income not received from possible vacant premises and the operating expenses associated with owning the real estate (taxes associated with the object, estimated repair fund, administrative and maintenance costs, etc.) have been subtracted from the total possible income (e.g. lease income). The value of real estate increases when operating income goes up and vice versa.
How much does the real estate management service cost and what should be kept in mind in connection therewith?
The price of the real estate management service largely depends on the purpose of use of the building (residential, commercial, warehousing, etc.), the number/volume of services required for normal usage of the building and performance of the requirements arising from law. The price of the management service (e.g. EEK/m2) can be given only with regard to a special object/building.
Are realtors trained in Estonia? What can be professionally expected from them?
Realtors have been trained in Estonia since 1993 in the form of short courses organised by real estate companies and training companies.
Almost one hundred realtors have passed the exam required for attestation and their knowledge has been declared sufficient for providing quality services. A realtor's key skills certainly include knowledge of legislation, the skill of organisation of the sales process and basic knowledge of construction standards.
Do I have to pay income tax on the sale of my apartment or house and how is it calculated?
Sale of residential premises that were in personal use is not subject to income tax. When you sell residential premises where you do not live yourself (e.g. an inherited second apartment, etc.), the income will be calculated as the difference between the acquisition cost of the property (to which transaction costs and maintenance/repair costs can be added) and the sales value. Such income is subject to income tax on the basis of the currently effective rate (the income tax rate in 2009 is 21%) by 1 July of the year following the sale.
What is the taxation price of land? Is it the market value?
The taxable value of land serves as the basis for determining the land tax for its user. The taxation price is found in the course of the regular appraisal organised by the state on the basis of the sales transactions concluded in the relevant region within the last years. However, the taxation price and market value of the land cannot be considered the same.
Why is the market price determined by an appraiser sometimes lower than the agreed sales price?
The appraiser considers the market situation and the previous transactions concluded with similar properties. The appraiser is unbiased, i.e. independent of the given transaction, when appraising the market value. The buyer and the seller may proceed from subjective and often emotional factors in their price negotiations, which is why the market value given by the appraiser and the agreed sales price need not coincide.
What does the bank take into account upon granting a housing loan?
The bank takes into account the present and future solvency of the borrower (family), other fixed obligations (e.g. a lease agreement in force), the borrower’s past payment behaviour, the value and location of the collateral.
Why should I prefer Arco Vara to other real estate companies?
The Arco Vara Group is a network of companies that offers a broad selection of services, which means it can prepare a suitable service package for each client. Our specialists are devoted to the client’s interests in close mutual cooperation, focusing not so much on the real estate object, but the client.
Does Arco Vara offer its services outside Tallinn?
Arco Vara covers the whole of Estonia by today (see the Branches section) and it also has leading real estate agencies in Latvia, Ukraine and Bulgaria.