Valuation as a basis - equally important for sellers and buyers
German property owners They are currently benefiting from a near-integral increase in the market values of their properties, commonly referred to as market value. In this case, the statistics in this case mainly refer to foreclosures, so that only a small part of the market is reflected. Even if an ideal value is added to many people, there are ways and means of valuing a property using objective criteria and widely recognized methods. The whole thing should also be seen against the backdrop of the threat of legislative regulation, especially in terms of renovation of old buildings and energy efficiency.
With this article, we would like to give you a brief overview of the subject of valuation and draw attention to the essential points.
Properly entering into negotiations
Knowing the true market value of a property is important not only in terms of the sales proceeds ultimately to be achieved, but also for the negotiation that precedes the whole. For example, if the actual and supposed market development (increase in value) diverges too much, for example in big cities such as Frankfurt am Main, then you are lacking in possible negotiation strategies when selling. The risk of accepting too large a mark or of paying too high a price is therefore higher. The market regulates supply and demand, so that a sometimes offered over several years house can certainly be traded only at a discount - a constellation, which is often found in individually designed family houses, where owners based on high-quality elements of a much higher value and wrong estimate
First and foremost, this is remedied by a professional appraisal carried out by recognized experts on the basis of the three procedures defined by the Immobilienwertermittlungsverordnung. The comparison value method determines the market value by comparing similar real estate. The tangible asset method refers more to the pure manufacturing costs, always with reference to the costs for a new construction of the property. On the other hand, the income value method is more likely to be used for yield objects, so that people can count on the right calculation for their old-age provision.
Key terms in this context
Often, scientifically sound methods are used which can not necessarily be separated from one another by laypersons. But as often banks are also involved, for whose calculations the valuation standards play a superordinate role, the buyer or seller should at least know the basics.
- Market Value This value defines the objective exchange value, thus calculated from the pure material value and the current market situation. It's about how much can actually be achieved in the current market environment. It also plays a role in foreclosures.
- Yield value This is about defining the long-term earnings potential of a property in combination with the land value as a total value. Long-term earnings potential is given by rental income, for example, which is heavily dependent on regional components. The result is the time that is necessary for the amortization.
- Real value With this value in the center stands, to quantify the objectively measurable framework of the real estate. The material value is determined from the soil, investment and external investment value. Today energetically meaningful plants and the like play a role. In the course of financing, the tangible asset is used to determine the mortgage lending value.
Hard Factors Significant
Sellers see the specific details of the property as an increase in value, while buyers take the cost of an exchange or refurbishment to scale and deduct it. In general, no connection can be established here, in most cases, however, strong structural changes (fireplace, conservatory, etc.) will not have a noticeable effect on the value of the property. Old boilers need to be replaced, older windows and doors have too little insulation, the roof shows obvious damage and the pipes are over 30 years old - such details are important as they mean tangible costs for buyers in addition to sales value itself
A professional report protects sellers and buyers alike for excessive losses, but in any case it offers a good negotiation basis and is worth the investment.
Artikelbild: © Alexander Raths / Shutterstock
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