Am I allowed to sell my house for as much as I want?

The legal aspect: usury and exploitation

Let's start with the law. Can the price of a detached house be as high as you want? Theoretically, yes. But there is a legal limit: usury (Art. 157 of the Criminal Code).

Usury exists when someone exploits another person's vulnerable situation, dependency, inexperience, or weakness of character to gain a financial advantage that is clearly disproportionate to the service rendered. However, this is extremely rarely relevant in practice when it comes to the price of a single-family home . Since property buyers in Switzerland are usually not in dire straits and do not need to buy a specific house immediately , this legal provision hardly applies. As long as the buyer is of sound mind and has alternatives, an inflated price for a single-family home is, legally speaking, usually "only" a bad deal for the buyer, but not a crime on the part of the seller.

The banks' veto: The real brake on the price of single-family homes

The toughest line isn't drawn by the judge, but by the bank. This is the point at which most dreams of an astronomically priced single-family home are shattered.

In Switzerland, buyers rarely finance a property entirely out of their own pocket. They need a mortgage. The bank doesn't assess the price of a single-family home based on what 's stated in the purchase contract, but rather on the property's actual value (market value).

This is where the so-called lower of cost or market principle applies. An example :

• You set the price for the detached house at 1.5 million Swiss francs.
• You will find a buyer who is willing to pay this price for a detached house .
• However, the buyer's bank values the property at only 1.2 million Swiss francs.

The result: The bank only lends (finances) the 1.2 million (usually up to 80%). The buyer has to pay the difference of 300,000 francs out of their own pocket, in addition to the usual 20% down payment. If you set the price of a detached house too high, your target group shrinks dramatically to the few buyers with substantial cash reserves. An overpriced detached house simply makes the property unaffordable for average earners.

The market and the "shelf warmer effect"

Many owners think: "I'll just try it with a high price for a detached house . I can always lower it later." That's a dangerous strategy.

The price of a detached house significantly determines how much attention your listing receives in the first two weeks. If the price is too high compared to similar properties, potential buyers will move on. The property will remain unnoticed. If a house is listed on portals for months, buyers become suspicious. They suspect defects. If you then have to lower the price later, it appears as an admission of failure. Often, this results in the final sale price being lower than if you had started with a fair market price. The market punishes greed. A realistic price creates competition, an inflated price creates silence.

Tax consequences of a high-priced single-family home

If you actually find someone willing to pay your asking price, the tax office will be happy for you. The price of the single-family home is the basis for calculating the capital gains tax on real estate.

The higher the price of a detached house , the higher the profit (difference between purchase price and selling price). Since capital gains tax is progressive, the tax burden increases disproportionately. Therefore, an extremely high price for a detached house does not mean that every extra franc ends up in your pocket.

A special case is the sale to relatives. Here, the price of a single-family home cannot be arbitrarily set too low without incurring gift taxes or problems with advance inheritance (mixed gift). However, in the other direction – i.e., an inflated price for a single-family home to one's own child – the tax office will hardly object, since it collects more tax. The child, however, then pays property transfer tax on an artificially inflated price for the single-family home .

Price of a detached house: Differences between city and country

The tolerance for a high price for a detached house depends heavily on the location. In hotspots like Zurich, Geneva, or Zug, the market often accepts premiums that are difficult to explain rationally ("collector's values"). Here, a price for a detached house that is 20% above the bank appraised value can certainly be achieved because there are enough buyers with sufficient capital.

This doesn't work in rural areas with lower demand. There, the price of a single-family home is much more closely tied to its actual value. Anyone who overcharges for a single-family home in these areas will be stuck with the property. Newcomers often underestimate how well- informed locals are about the appropriate price of a single-family home in their community.

Strategy: How do I find the right price for a detached house?

To avoid falling into the trap of being unsellable, you should have the price of your detached house objectively determined.

• Analyze listings in the neighborhood to get a feel for the price of a single-family home .
• Use online valuation tools to get an initial price range for a detached house .
• Talk to experts who know the exact local price of a single-family home .

Remember: A price for a single-family home is only good if it's actually being paid. An unrealistic price for a single-family home is useless if it only exists on paper. Market mechanisms ensure that the price of a single-family home usually settles where supply and demand (and affordability) meet.

Conclusion

Can you sell your house for as much as you want? Legally speaking: Yes, as long as you're not engaging in usury. Economically speaking: No. Banks act as guardians of the price of single-family homes by only financing the actual market value. Setting the price too high severely limits your pool of potential buyers and carries the risk that your property will be considered "tainted."

Ultimately, it's not your wishful thinking, but the buyer's affordability that dictates the maximum price of a single-family home . Anyone who wants to sell successfully must prioritize realism over wishful thinking.

If you want to safely navigate the fine line between maximum profit and market reality, Loft offers you the necessary data and tools to find the optimal price for your property.

Glossary

• Price of a detached house: The amount agreed upon in the purchase contract for the transfer of ownership. It can from the estimated Market value deviate .
• The lower of cost or market principle: A fundamental principle of bank financing. The bank lends either the purchase price or its own appraisal – whichever is lower. This often caps the effective loan amount. achievable Price of a detached house .
• Usury: The criminal exploitation of a situation of duress to obtain a disproportionately high price (Art. 157 of the Swiss Criminal Code).
• Capital gains tax: A tax levied on the profit from the sale of a property. A higher price for a single-family home directly leads to a higher tax burden.
• Slow seller: A property that remains unsold for a long time due to an excessively high price and therefore loses its appeal.