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PROPERTY

7 key things to think about before you sell your home in Sweden

The property market tends to move fast in Sweden, but if you want to sell your house or apartment it's a good idea to prepare well in advance. These are seven things you should be considering if you want to make a sale.

7 key things to think about before you sell your home in Sweden
How can you maximise the value of your property before selling? File photo: cottonbro/Pexels

Timing

Should you sell your home before or after you've bought somewhere new to live? There are pros and cons to both approaches, and it depends on your own personal and financial situation.

If you sell first, you know exactly how much money you've got to put towards your new home, but you might find yourself rushing to find your new place. Banks will usually tell you that selling first is safer. If you buy first, you may need to use a bridging loan and might feel rushed to sell.

You should also think about timing in terms of both seasonal variations in the housing market and the wider economic situation, although try not to get too worried about this – if you need to move, it is not always possible or sensible to wait for the optimum time. Summer and Christmas are slower seasons for property sales due to holidays, but that can also mean less competition.  

It is hard to know how the economy and house prices will change in future, but if you know you will be selling a property before too long, it is smart to start following the news. This way you will know if any laws are set to come in that make it more expensive to sell, for example, and can follow expert predictions of how prices will develop. Just be aware that even the professionals won't always know for sure! 

Coronavirus concerns?

At the moment it's impossible to say how the coronavirus crisis will affect the Swedish economy and housing market. As of July, no major changes to the buying or selling process have been made in Sweden, but the market has still been affected. Expert estimates have predicted that in a worst-case scenario, property prices may drop as much as 12 percent but at the moment this has not happened.

Because of the increased uncertainty, you might want to think extra carefully about any gap between selling and buying – it's possible the market could change significantly.


Photo: Erik Johansen/NTB scanpix/TT

Valuation

You can do your own research on property values by using sites like Hemnet and Booli to find out how much similar properties have sold for recently. Bear in mind that factors like which floor an apartment is on, what condition it is in, layout, and extra bonuses like a spectacular view or laundry room in the building can all change the overall price. It could be a good idea to follow some bidding processes on Hemnet, to start getting a feel for property values in your area.

Then, most estate agents will carry out a valuation with no obligation to pay for their services, so it is worth shopping around and comparing a few quotes.

Presumably you will be hoping to get the best price possible, so think about what you could do to increase the value. That could be something small, like leaving the home in great condition before taking photos for the ad, or it could be a big step, like carrying out some renovations to make it more attractive to buyers.

Fixing up small flaws is usually worth it, and newly renovated apartments tend to fetch the highest prices, but will it be worth the cost and hassle to you? These are questions that you probably want to talk through with an expert, which brings us to…

Choosing an estate agent

There's no legal obligation to hire an estate agent, and you can take care of the selling yourself to avoid the extra cost, but it is by far the most common way to proceed in Sweden. Websites like HittaMäklare.com (linked to the bank SBAB, and only available in Swedish) or MäklarOfferter (also only available in Swedish) allow you to compare fees and customer satisfaction ratings.


Your estate agent will be representing your property, so you need to be confident in them. Photo: Fredrik Sandberg/TT

You can meet a few different estate agents to get a feel for who you would like to work with. If you are following bidding on similar apartments, make sure to keep track of different estate agents – how do they present the properties, and how successful do they seem to be? 

You will also need to look into the fee, which is usually mostly based on a commission rather than a fixed fee. When you speak to estate agents, ask about the fees, how they carry out market research and what they would value your property at, and how they manage viewings and bidding processes. 

Know your property

When you prepare for the viewing, you need to present prospective buyers with as much information as possible about the apartment. Things like extra storage, shared facilities, and recent renovations could all help you bump up the price so make sure your estate agent knows about them.

Think about questions a prospective buyer might have, and help your estate agent prepare to answer them. Perhaps the property has some especially charming features you would like them to highlight, or the area has a popular restaurant. You want the viewers to be able to imagine themselves living here.

It is also important to be honest about any problems. You can be held liable if you give incorrect information to the buyer, and may even need to pay damages in future, so it is very important that you give the correct facts, including any known flaws. If you are selling a house that is not part of a housing association, you generally get a full survey done to help with this. 


Photo: Fredrik Persson/Scanpix

Know your red lines

As you may remember from buying your property, the Swedish housing market moves fast and sales can be concluded within a matter of days. As the seller, you need to make sure you have set your own goals so that you will be able to work with prospective buyers and avoid slowing down the process at the crucial final stages.

Two of the most important things to think about are the lowest price you would be happy settling for, and any requirements you have about the move-in date. If you have already set a move-in date for your next home, you probably want to be out of your current apartment (and stop paying the mortgage) as soon as possible. If you are moving in with a partner, you may be able to be more flexible.

Viewings and bidding

By this point, your home is ready to go on the market.

There is a lot to think about, from the length and timing of the viewing, and whether you want open viewings (the most common, meaning anyone can attend) or only host viewings for individual interested buyers.

Hopefully, after the viewings someone will make an offer – perhaps at the listed price, or below it. If you live in a popular area, you may well receive multiple offers in which case a bidding process starts, or a buyer might make an offer above the starting price before the open viewings start in an attempt to take the property off the market.

It is a good idea to have thought about what you want to do in each of these scenarios beforehand so you do not have to make a decision in a hurry.

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MONEY

How you can lower the monthly cost of your Swedish mortgage

It’s no secret that mortgages in Sweden have become more expensive over the last year or so, as interest rates have risen following high inflation. But did you know there’s a way you can lower your monthly mortgage cost?

How you can lower the monthly cost of your Swedish mortgage

Essentially, when you take out a loan in Sweden, the government gives you a discount on the interest you pay, in the form of a tax rebate.

This doesn’t include interest paid on all types of loans – for example, student loans are not included – but it does include your mortgage.

In order to qualify for the discount, referred to as ränteavdrag (interest deduction) or skatteavdrag (tax deduction), you need to fulfil some requirements: 

  • You’ve paid income tax and at least 1,000 kronor in interest in the last taxation year
  • You have a capital deficit (meaning that your interest costs must be greater than any capital income you’ve earned through interest or dividends)
  • You are either partly or wholly responsible for the loan or mortgage in question

If there are two of you who are both named on the mortgage who fulfil these requirements, you’ll each receive 50 percent of the total tax rebate.

The interest deduction is automatically subtracted from your yearly tax and listed in your yearly declaration, if you fulfil the requirements, meaning you’re likely to get it back as a lump sum when tax season rolls around in April.

How much do I get?

The actual sum you get back varies depending on how much tax and interest you’ve paid during the year, but there are some general calculations which can give you a guideline of what you might get.

You’ll get 30 percent of your interest costs back on the first 100,000 kronor you pay in interest over a year, and 21 percent on anything over 100,000 kronor. 

If there are two of you, you each have your own individual tax deduction, even if you’re paying the same loan, so as a pair you’ll get back 30 percent on the first 200,000 kronor, as well as 21 percent on anything over this figure.

To figure out how much you’ll get, you need to first find out how much interest you’ve paid during the year your declaration covers and subtract this figure from your capital income earned through interest or dividends.

If your figure is negative, that means you can subtract this figure from your tax paid during the year. Bear in mind that if you owe tax, then your interest deduction amount will be used to pay it back first, lowering the total amount you receive.

You can also change the proportion of the deduction applied to each partner if you share a mortgage, dividing it 60/40 or 70/30, for example, if you don’t share the mortgage 50/50. You can do this through your bank or by manually changing the figures in your tax declaration.

I don’t understand. How does this make my monthly mortgage payments cheaper?

Here’s where something called skattejämkning comes in. This literally translates as “tax equalisation”, and it’s a way you can spread your tax rebate for interest costs out over a year, lowering your mortgage costs each month rather than of getting a lump sum in the form of a tax rebate during tax declaration season.

In order to equalise your tax, you’ll need to contact the Tax Agency directly, filling out a form with the catchy title of SKV 4302 – Jämkning (ändring av preliminär A-skatt) or using their Jämkning online service.

To do this, you’ll need to have in-depth figures on things like your salary, pension payments, sick pay and any other income like unemployment benefit or maternity or paternity payments, as well as capital income and any business income for the tax year you’re applying for, as well as your expected income for the rest of the year.

If your application is accepted, the Tax Agency will tell your employer to subtract less tax from your payslip each month, effectively meaning that you get your tax rebate for interest costs back in your monthly pay instead of getting it paid out all at once.

Bear in mind that if you do go down this route it’s important that your calculations are correct. If you accidentally overestimate your interest payments or underestimate your tax owed, you could end up being hit with a hefty tax bill once your declaration comes through.

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