Determining the market value – The determination of the market value of a property is regulated by law in the Real Estate Valuation Ordinance(ImmoWertV). In addition to the type of use, the size and condition of the property, the energy efficiency of the property is also an important factor in determining the market value. The market value is determined by an estate agent or surveyor. Everything you need to know about market value and valuation methods 2025 here!
The market value is the price that can be realized in the ordinary course of business within the specified time frame in accordance with the legal circumstances and actual characteristics, the other properties and the location of the property or the other object of the valuation.
In 2004, the term “market value”, which is used throughout the EU, was added to the definition of market value in Section 194 of the German BuildingCode (BauGB). The market value is therefore an estimate of the price that can be achieved on the market. The market value is generally used for the sale and purchase of land and buildings. It may also be necessary to determine the market value in the event of foreclosures, tax assessments by the tax office, divorces and inheritances .
Where can I find the market value?
You won’t find the market value in a list, it has to be calculated using the typical valuation methods – more on this in a moment.
Determining the market value: How do you calculate the market value?
The market value assessment refers to the macro-location (city/region) and micro-location (immediate surroundings of the property) of the property, its section, size and any existing land charges that may reduce the value. In accordance with the BauGB, the market value is not a permanently fixed value, but refers to the reference date stated in the appraisal. It is possible that the market value may change significantly over a certain period of time.
The market value quantifies the value at the time of valuation. The market value appraisal takes the following points into account:
Material value of the property, if developed
Nature and location of the property (size, type of development)
Legal circumstances (e.g. land register, monument protection)
Other objects of the valuation
But:
In reality, however, market demand has a decisive influence on the value of your property.
The demand for real estate and the features sought vary greatly from region to region. Just think of A-locations such as Munich and Berlin, where the location plays a major role in the market value.
Documents for determining the market value
The following documents are generally evaluated for the valuation of real estate sales:
Land register extract
Building plans, floor plans, sections
Building description
Site plan and parcel map
Calculation of living space
Energy certificate
For condominiums, the following are also required:
Minutes of the last three owners’ meetings
Business plan
Declaration of division (land register)
Housing benefit statement
For income-producing properties, these must also be submitted:
Operating costs
Rental listings
Rental agreements
Rights and encumbrances must also be viewed:
Notarial deeds
Special registrations (rights of way, residential rights, etc.)
Weighting of criteria for market value
Particular weight is given to the location and the expected future risks of the property. The risks are mostly modernization risks, such as the costs to be expected due to a renovation backlog. The most expensive maintenance measures, which generally include the roof, cellar, windows and heating, are also assessed. The type of house is also assessed. A building built before 1945 is an old building, after 1945 it is classified as a new building. The exterior design, floor plan, garden, façade, room layout and lighting conditions are also taken into account.
Factors such as location, balcony and attractiveness for the target group play an important role in the rentability of the property. Other factors included in the valuation are, for example, an elevator and the property’s fixtures and fittings:
Plot area (proportionate living space or total area)
Living space according to the Living Space Ordinance (WoFIV)
Basement additionally usable or e.g. renovation backlog in the basement
Demographics for the property location
Property type (commercial, residential, care, listed, other special forms, mixed property)
Valuation: 3 valuation methods
All important information on the valuation of real estate sales and the other valuation procedures clearly summarized for you:
Income capitalization approach: Breakdown into market value & building income value
The income capitalization approach divides the property into the market value of the land and the income value of the building. This includes rental income, maintenance costs and the costs of managing the land and building. The rental income less management costs and the land value including interest are therefore compared.
Material value method: Value for the new construction of a property
In the asset value method, the market value of the land is first determined using the standard land value, after which the building asset value is added. The real value of the building is calculated from the building production costs less any age-related reductions.
The tangible land value (market value of the land) and the tangible building value are added together and multiplied by a tangible value factor. The calculation of the asset value factor depends on the type of building, the provisional asset value and the standard land value. The total tangible asset value calculated in this way indicates the financial resources that would be required to rebuild the property.
Comparative value method: Comparison with similar properties
The comparative value method compares your property with similar properties. It is used in particular when selling condominiums and residential buildings. The comparative value can also be determined for undeveloped land.
Only properties in similar locations and with a comparable layout are taken into account in the comparison. The properties included in the valuation should be in the immediate vicinity of the residential property. The comparative value method is considered to be particularly realistic. It is often used to determine the value of properties, as the locations are relatively comparable regionally.
Valuate property 2025
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