If you want to sell your condominium or house, you should definitely have a property valuation carried out. This has several advantages. Firstly, you will know how much your property is worth and how much you can expect to sell for. At the same time, you will find out what minimum price you should ask and which bids from potential buyers are below the value of your property.
In addition, apartments and houses that are offered at a realistic price can be sold much more quickly.
Find out here how the value of a property is determined, what to look out for and who estimates the property value for you.
When and why should the value of a property be determined?
Basically, it can be said that determining the value of a property is always useful or even necessary when a property is about to change hands. There are several scenarios in which this is the case. Probably the most common example is the sale of a condominium or house. You want to know how much your property is worth in order to sell it at a fair price.
But there are other examples in which an apartment or house changes hands. If the owner is deceased and the property is part of an inheritance, its value is also determined. A valuation is also useful in the event of a gift or a forced sale.
Other encumbrances could be, for example, that you wish to take out a loan. In this case, the bank will request an appraisal showing the value of the property in order to approve or reject the desired loan amount. If a couple divorces and the property is part of the joint assets, the valuation of the property is also important.
Who can estimate the value of a property?
There are several people and points of contact who can help you determine the value of your property. In some cases a free valuation is sufficient, in others a professional valuation is essential.
Determine the value of a property yourself
In times when the Internet is a faithful companion that provides us with helpful information, it is also possible to find useful information online for real estate valuations. You can make an initial estimate of the value of your property online with the help of free programs, calculators and apps. You don’t even have to register with many of these providers, but can get an initial, rough estimate with just a few details. If you want to sell your house or apartment, this valuation is often sufficient. After all, you want to have a point of reference that you can use as a guide during negotiations. Overall, we can recommend that you always consult an expert. Even if you have already carried out an initial valuation of your house or condominium online, you should also talk to an architect, civil engineer, estate agent or banker.
When is an appraisal from an expert required?
If the property is part of a legal dispute, a professional valuation by an expert will be necessary. In the case of a forced sale, the court commissions an expert to determine the value of the property to be auctioned. In the case of inheritance or divorce, the court also requests an expert opinion. The owner of the property commissions an expert to prepare such an appraisal professionally.
In order to be able to answer tax questions, the tax office requires complete documentation. If you own one or more properties, you must provide the tax office with a professional valuation report prepared by an appraiser or expert.
Such an appraisal adheres to the legally binding requirements. It comprises between 20 and 30 pages and contains not only the calculation of the value of the property, but also an in-depth justification on which this valuation is based.
What criteria play a role in real estate valuation?
When preparing a professional appraisal, the appraiser is guided by various criteria. The partial results of these observations and calculations ultimately produce the final result of the valuation of a property. Find out here which criteria, among others, are included in such an appraisal:
Market development in the region
How the entire real estate market in the region develops has a major influence on the valuation of your house or apartment. The high demand on the market significantly increases the value of your property. In many cases, this positive development can even offset the age discount. The term “age discount” refers to the age-related reduction in the value of a property. The uninterrupted use of a property causes its condition to deteriorate. This is a natural process. For this reason, the calculation of the value of a property includes an age-related reduction per year.
The condition of the building fabric and fittings
The fabric of the building must be assessed. For example, the doors, windows, floor coverings, water pipes and electrical installations are checked. How old are they? How often have they been professionally inspected over the years? Have any renovations been carried out? A market value assessment of the building fabric is carried out.
The year of construction of the property
The year of construction plays an important role in the valuation of a property and is therefore a key criterion in the calculation of the property value. Among other things, it is important to consider whether it is a new or an old building. When was the building constructed? If it is an old building, then the question of renovation work carried out must be answered. An old building that has been extensively renovated has a significantly higher value than an unrenovated old building.
Size of the living space
The size of the living space is not only determined by the number of square meters of usable space in an apartment or house. If a property has particularly high ceilings, this is taken into account positively. High ceilings in old buildings are very popular with potential buyers and increase the value of a property.
Balconies, terraces and gardens are also included. These are normally counted with a factor of 25 percent of their area. If the property has a spectacular and expensive garden, the percentage can be increased.
The construction of the building
First of all, the framework of the construction is considered. What foundations does the building stand on? Is it a prefabricated house, a masonry building or a timber house?
The quality and costs of the construction are included in the calculations. Added to this are the materials used inside the building and on the façade. Marble, stucco and floorboards made of real wood increase the value of a property.
The size of the property
In addition to the property itself, the land naturally also has a value. An initial estimate of the value of a house is based on the number of square meters and the price per square meter in the region.
There is also the question of the condition of the plot. Is it possibly a plot of land that is registered as additional building land and could be sold separately at a later date?
The location of the property
The location of a property plays a decisive role in determining its value. If a house is located in the center of a city, property prices are significantly higher than on the outskirts or in a rural location. The boundaries of the area also play a role. Is the building located in a mixed-use area, a purely residential area or possibly in an industrial area?
Land values in large cities such as Hamburg, Berlin, Frankfurt or Munich are significantly higher than in small towns.
The exterior of the house or apartment
The value of a property is increased by a garden, garages, carports, cellar rooms, parking spaces and bicycle stands. For this reason, it is essential to include these in the appraisal.
The energy efficiency of the property
Before a property is sold, a meaningful energy performance certificate must usually be applied for. If it is a building that has good thermal insulation, the valuation is much more positive. In this context, the heating system and the seals of the windows and doors are checked, among other things.
What does it cost to determine the value of a property?
While many property value calculators on the Internet are free of charge, the work of a professional valuer must of course be adequately remunerated. This is associated with costs on the owner’s side.
The price of an appraisal depends on its scope and accuracy. The cost of a comprehensive full appraisal is higher than the cost of a short appraisal. Overall, there is no price table that is prescribed by law. The cost of a professional appraisal is usually based on the non-binding regulation on “Fees for Architects and Engineers”, which came into force in 2009.
The short report
This is a short appraisal that is significantly less extensive than a market value appraisal. The price for such an appraisal is between €100 and €500, depending on its scope and complexity.
The market value appraisal
In everyday language, a market value appraisal is also referred to as a full appraisal. The costs usually range between €1,000 and €2,500.
The mortgage lending value appraisal
In order to approve a credit or loan, the bank requires the mortgage lending value of a property. The cost of such an appraisal is based on the hourly rate of a certified appraiser. This is around €130.
What is behind free offers to determine the value of real estate?
You can find free tools on the Internet to help you determine the value of your property. These offers are perfectly adequate for an initial valuation that gives you an indication. Such a valuation is often even sufficient for the sale of a property.
However, if the property is involved in legal proceedings, a professional valuation becomes unavoidable. In this case, contact a surveyor, estate agent or other expert to commission a comprehensive appraisal.
How does a real estate valuation work? An overview of the various procedures
The price of a property can be determined using various methods. The aim is to calculate the market or fair value. The asset value method, the capitalized earnings value method and the comparative value method are used as the basis for this.
The asset value method for preparing the valuation report
This procedure is used when a property is owner-occupied. The individual characteristics of the apartment or house, including the furnishings, for example, are fully taken into account in this procedure. The asset value of a property can be determined very well using this procedure. The asset value is made up of the land value and the value of the buildings. The land value required for this can be calculated using the comparative method. To determine the value of the buildings, the production costs or replacement costs are determined. The condition of the building and the fixtures and fittings have a major influence on the value of the building structures.
The capitalized earnings value method
This method is used for properties that have been rented out in the past and have therefore generated income. It analyzes how high the rental income has been in recent years. On the basis of these key figures, the amount of capital the property will still generate is calculated. A remaining useful life is estimated for this, as a time frame is required for the calculations.
The comparative value method
The value of the property is estimated using the comparative value method, in which comparisons are made with similar buildings. The comparison is made on the basis of other properties that are on the market or have recently been sold. Of course, several factors must be taken into account in this process. The location, size, fittings and other features must be similar to those of the comparable properties.
Conclusion
The reason for the valuation determines whether a free online property valuation is sufficient or whether a professional appraisal is essential.
If you are carrying out a voluntary valuation of your property because you want to sell it, you can use the free programs and apps on the Internet. However, if your property is involved in legal proceedings or is to serve as a guarantee for a loan, a professional appraisal will be ordered. In such a case, you must have the value of your condominium or house determined for the tax office, your bank or a court.
The cost of a professional valuation varies depending on the valuation procedure. Contact your estate agent, surveyor, civil engineer or other expert directly for a specific cost estimate.
FAQ
Can the tax office also determine the value of a property?
If a property is transferred to a new owner as part of an inheritance or a gift, the tax office determines the value of this property. This is based on a standardized mass procedure because, unlike an appraisal by an expert, there is no on-site inspection. However, the authority still bases its appraisal on the data provided by the expert committees. This includes, for example, the standard land value.
What documents are required for a real estate valuation?
The following documents are required to determine the value of a property:
- Modernization certificates
- Construction drawings
- Extract from the cadastral map
- Calculation of living space
- Current extract from the land register
- Extract from the list of building encumbrances
- Additional documents for monuments, condominiums, heritable building rights, etc.
What is the "quality deadline"?
This term refers to the point in time to which the professional appraisal relates. The determination of the value of a property refers to the condition of the property and its furnishings at a specific point in time.
What is the legal basis for real estate valuation?
The legal basis on which the real estate valuation is based can be found in the Building Code (BauGB) and the Real Estate Valuation Ordinance (ImmoWertV).
