Mar 28th 2024 How do you determine the value of a property?

Anyone who wants to buy or sell a house, land or property should first get a precise impression of the value of the respective object. This works best with a property valuation. It determines the market value of the property, i.e. the amount that can probably be achieved through a sale.

However, the term real estate valuation is quite flexible because there are big differences in terms of the procedure and the result. For example, there is the online assessment, for which a small list of questions usually has to be processed within a website. The answer can be completed with just a few clicks, but the subsequent evaluation is only of limited significance and therefore often serves more as a rough assessment.

A professional property valuation, on the other hand, involves significantly more factors. It is much more precise and is carried out either by real estate agents or by independent or court-certified experts.

What criteria are included in the property valuation?

Of course, it depends on whether it is a private or commercial property, a piece of land or a property. However, the following evaluation criteria are almost always applied.

The first priority is the year of construction and the condition of the building. It is important here that both criteria are taken into account together. Newer properties usually have a higher value than older buildings, but in some cases an outdated but completely renovated property can be much more valuable than an unrenovated and relatively new building.

The area is no less important. The larger the area of ​​a plot of land or a property, the higher the value is usually. But be careful: the location also influences the property valuation. For example, if the property is located in a rural region, the market value is usually slightly lower.

Another factor is the equipment. Among other things, the windows, floor coverings and heating system are assessed. The current market situation also plays a role. Is the market highly competitive or characterized by vacancies?

And then there are the legal framework. Is the property possibly listed? And is the current property owner also the property owner?

Since there can always be changes in the real estate industry over time (for example in energy efficiency or sustainability), special standards must be taken into account as part of an assessment. This is the only way to ensure that the property valuation is carried out completely seriously and professionally.

The most important standards are summarized in the “Real Estate Valuation and Sustainability” collection of standards. The work forms a secure basis for professional valuations of real estate and properties.

What procedures are used for property valuation?

Three different methods are currently used.

The comparative value method is always suitable when a piece of land or a self-used building is to be valued. Here, the purchase prices of similar and already sold properties serve as the basis for the valuation. The greater the number of reference values ​​in terms of size, location, condition and features, the more accurately the market value can be determined. Since this procedure takes the actual market situation into account, it is considered particularly meaningful.

The material value method is also common. The first step is to determine how much the property would currently cost as a new building. Both the building value and the land value are taken into account. Necessary renovation measures or damage will be deducted from the total. Since this is more an assessment of the manufacturing costs and less about the current market situation, this procedure is used less frequently.

The third variant is the income value method, which is mainly used for rental properties. The focus here is on the achievable return on the property. When calculating the income value, the net income, the land value, the remaining useful life or maintenance costs and the property interest rate are taken into account.

What do I have to do if I want to have my property professionally valued?

A serious, professional and comprehensive property valuation requires a high level of professional expertise and can definitely not be completed in just a few minutes. It usually starts with a personal consultation. What wishes and ideas do you have? What is the purpose of property valuation? Are there any special things to consider?

Of course, the experts also need the complete documents for the property. In addition, the real estate agents also look at the property in question themselves and directly on site. Without a personal inspection, a meaningful and, above all, trustworthy property valuation is hardly possible. In addition, it is of course also important that the broker or appraiser has the necessary regional market knowledge.

Are you interested in a property valuation? Then contact us and one of our qualified real estate agents will contact you immediately.