Selling property discreetly: the quiet sale from the owner's side

There are two reasons to sell a property without a listing. The first is discretion: a sale is a statement about wealth, family circumstances and sometimes about a separation. The second is peace: whoever offers a property publicly invites viewing tourism into his living rooms.

Both are legitimate. Both have a price that is rarely named openly. This article names it, describes the routes that actually work, and marks the points at which discretion legally ends.

A quiet sale is not secrecy but a controlled chain of information. You decide who learns of it — not whether anyone learns of it at all.

Where discretion ends

The first misconception is the expectation that a sale can remain invisible. It can remain free of an audience. The following will learn of it in any event:

• ✦Notary's office. Notarial recording is mandatory, § 311b BGB. Without it the purchase contract is void.
• ✦Tax office. The notary reports the disposal within two weeks under § 18 GrEStG.
• ✦Municipality. Enquiry as to the municipal right of pre-emption under §§ 24 ff. BauGB, usually in the form of a negative certificate.
• ✦Land registry. Conveyance and transfer of title. Inspection only on a legitimate interest, § 12 GBO.
• ✦Tenant. On conversion into freehold flats the tenant has a right of pre-emption, § 577 BGB.

That is no bad news. All the bodies named are bound to confidentiality or restricted by law in what they may disclose. The land register is precisely not a public register in the literal sense: under § 12 GBO, inspection is granted only to those who demonstrate a legitimate interest. Curiosity does not suffice.

Anyone who promises you absolute secrecy either does not know the procedure or takes undertakings lightly. Either is a reason to end the conversation.

What forgoing the open market costs

The open market has a single function that no network replaces: it creates competition and thereby a price indication. Where it falls away, you negotiate without a comparable offer.

How large this discount is cannot be stated seriously in a single figure. There is no official statistic on the share of off-market sales in the German residential property market; the percentages in circulation come from intermediaries who offer precisely this business and are not verifiable. We therefore do not name them here.

What can be said: you replace price discovery with examination. Instead of setting twenty prospective buyers against one another, you need two or three serious buyers whose financial standing has been clarified before they enter the house. That is the consideration for the quiet — and it is work, not chance.

An independent valuation replaces the market test in this procedure. A market value report or a valuation under the Real Estate Valuation Ordinance costs a fraction of what a price negotiated too low costs, and it means you negotiate on your own basis rather than the buyer's.

The routes that actually work

First: an agent with a sole mandate and a vetted pool of buyers. The licence under § 34c GewO is mandatory and can be asked about in two minutes; since 2018 a continuing-education obligation of twenty hours in three years applies in addition. The decisive point is not the licence but the question of whom the agent plans to approach and how he knows that these people are able to buy.

Second: notaries, lawyers and tax advisers. In estate, separation and business succession matters they sit at both ends of the chain and may not broker — but they know the market and know who is currently looking. A pointer from that quarter is the most discreet form of approach, because it is covered by professional confidentiality.

Third: curated networks and family offices. Here a single quality counts: is it examined, before information is passed on, who receives it? A network that sends your property to a distribution list has turned a quiet sale into a listing — only without a portal's reach. That is the worst of both procedures.

What such access looks like from the buyer's side we have described in the article on off-market property. It is the same chain, read from the other side.

Obligations that apply even without a listing

Without a listing, the mandatory particulars for property advertisements under § 87 GEG fall away — energy source, year of construction, energy performance indicator and efficiency class need not be published anywhere. The obligation under § 80 GEG remains: the energy performance certificate is to be presented to a prospective buyer without delay, at the latest at the viewing, and handed over after the contract is concluded. A breach is a regulatory offence.

The duty of disclosure applies undiminished. You must disclose hidden defects that you know of. The customary exclusion of liability for material defects in the purchase contract does not help in cases of fraudulent concealment: under § 444 BGB the seller cannot rely on it if he has fraudulently concealed a defect. Damp, contamination, an unapproved extension, an ongoing dispute with a neighbour — what you know belongs on the table, and on the record.

The quiet sale sharpens this subject rather than easing it. With a property that has never been publicly examined, the documentation is your only protection against the later assertion that you concealed something. Assemble the papers in full before the first viewing:

• ✦A current land register extract including sections II and III
• ✦Cadastral map, register of public building charges and, where maintained, an extract from the register of contaminated sites
• ✦Building permit, construction drawings, calculation of living and usable floor area
• ✦Energy performance certificate, valid for ten years
• ✦For freehold flats: declaration of division, collection of resolutions, minutes of recent years, budget and the state of the maintenance reserve
• ✦For let properties: tenancy agreements, rent schedule, service charge statements
• ✦Evidence of refurbishments, servicing of heating and lift, chimney sweep reports

Commission: who pays, and how much

Since 23 December 2020, §§ 656a to 656d BGB have governed agents' costs on the purchase of flats and single-family houses by consumers. Three points of these concern you as the seller directly.

Under § 656a BGB the agency agreement requires text form; a verbal undertaking does not bind you. Where the agent acts for both sides, under § 656c BGB he must charge both the same — and on a breach loses his claim against both. If you pay alone, under § 656d BGB the buyer may be charged at most with half, and his share falls due only once you have evidenced your own payment.

Market practice is a total of roughly 3.57% to 7.14% of the purchase price including VAT. That is always negotiable; with high purchase prices a degressive rate is customary. Under § 652 BGB the claim arises only on success — for marketing, photographs and conversations you owe nothing without a sale, unless something else has been effectively agreed.

If you concluded the agency agreement as a consumer at a distance or away from business premises, you have a right of withdrawal of fourteen days under §§ 312g and 355 BGB. Where the notice of withdrawal is missing, the period is extended considerably.

Reservation fees and advance payments

A reservation fee agreed in pre-formulated contract terms and payable irrespective of success is invalid. The Federal Court of Justice ruled to that effect on 20 April 2023 (I ZR 113/22); amounts already paid can be reclaimed.

For you as the seller, the reverse of this pattern is the relevant warning: anyone who demands an advance payment from you for marketing, valuations or access to a list of buyers is not selling you a service but shifting his business risk onto you. An intermediary who believes in his own pool of buyers will work on a success basis.

The payment process

Cash payment has been prohibited in property purchases since 1 April 2023. § 16a of the Geldwäschegesetz prohibits settling the purchase price with cash, crypto assets or commodities such as gold; the notary must be provided with evidence of the non-cash payment flow and, without that evidence, may not have the title transferred.

Under the Geldwäschegesetz, agents and notaries are obliged to identify the parties involved and to report anything unusual. A buyer who evades the clarification of the source of funds is no discreet buyer but a procedural risk. A quiet sale is precisely not a procedure with relaxed scrutiny — it is one with a smaller audience and the same scrutiny.

Customary and sufficient is payment directly to you following the notary's notification that the price is due. A notary escrow account is the exception and permissible only where there is a particular need for security; it causes additional costs. Notary and land register costs follow the GNotKG and together customarily amount to roughly 1.5% to 2% of the purchase price — under the contract they are regularly borne by the buyer, as is the property transfer tax of 3.5% to 6.5% depending on the federal state.

Tax: the period that decides everything

The gain from the sale is tax-free under § 23 EStG where more than ten years lie between acquisition and sale. What matters are the dates of the notarial recording, not those of handover.

Irrespective of that period, the gain remains tax-free if you used the property yourself for residential purposes in the year of the sale and in the two calendar years before it. For let properties and for capital investments this exception does not apply.

Anyone disposing of several properties in quick succession risks classification as a commercial property dealer, with trade tax as a consequence and the loss of the ten-year period. Where that line lies in your case is decided by your tax adviser — not by an article such as this and certainly not by an intermediary.

Three patterns at which we break off

The first is the list of buyers without evidence. Anyone who claims to have three financially strong prospects for your property can say how their standing was examined, without naming a name. Anyone who cannot has a narrative and no buyer.

The second is advance payment for marketing, in whatever wrapping. See above: the risk belongs to the party who promises the service.

The third is the non-disclosure agreement as a substitute for examination. An NDA is a useful instrument and does not protect you from your property data sitting with someone whose intention to buy was never examined. Examine first, then have it signed, then show the documents — in that order. Why discretion is a structure and not an undertaking is dealt with in our article on discretion, and how a provider is examined in practice in the article on the vetting of luxury service providers.

Frequently asked questions

The quiet route to a sale

A quiet sale succeeds when three things are in place before the first approach: a valuation basis of your own, complete documents and a clear rule on who learns what and in which order. Everything else is negotiation.

The Allocation1 does not broker property and charges no commission on any mandate. We structure your requirement — property, framework, time horizon, degree of discretion — and present it exclusively to vetted service providers. Your name is withheld until you release it. You are welcome to request an invitation.

Access to The Allocation1 is by invitation. We review enquiries carefully and respond discreetly.