Valuing a house: Estimate purchase Price or have it Estimated? Valuation

If house or dwelling were bought not too long ago, building costs or the purchase price offer first approximate values with the house evaluation. On the Lukinski real estate portal you can get more information about the current value of your property by comparing it with properties in similar locations, of the same size and with the same fittings etc. Our exact determination of the property price depends on various criteria. Value factors, location, equipment, market value, realistic price: This is how you can evaluate your real estate property.

House Valuation

The most important criterion is the location. The real estate prices varied regionally partly considerably. Therefore only objects in the proximity may enter into the real estate comparison. As experts for the real estate sales in the regions Rhineland-Palatinate and Hessen we can give fast a realistic estimate over the real estate comparison. With the house evaluation likewise aspects of the micro and macro situations, as well as the direct location of the object are of importance: Soundscape, view and lighting conditions interest potenzielle buyers and affect real estate value and the attainable price.

Before we get deeper into the matter of evaluation of location, building fabric, market value & Co., we first ask 3 basic questions which reach us in consulting discussions with customers:

  • How can I value a property?
  • How does the bank value a property?

Definition Market Value: Simply explained

The fair value is defined as the price that is calculated at a certain point in time according to different wars and that is realizable for the property in the ordinary course of business. There are several starting points for determining the fair value. On the one hand, they concern the legal circumstances and on the other hand, the actual characteristics of the property. This means the state of renovation, the equipment, the location in the building, the energy certificate, etc. Personal circumstances of the owner are not taken into account. So it does not matter for the market value whether and how urgently an owner needs the money from the sale. The general demand for the respective type of property, however, affects the market value. In European law the term market value is rather not used. Here one speaks already longer of the market value.

To determine the value of a property, three different procedures for determining the market value are defined. A house evaluation takes place approximately with the real value procedure, the income value procedure and the comparative value procedure. With all valuation methods, the material value of the property is decisive first. The valuation methods are applied individually or in combination. The choice of the procedure depends primarily on the use of the apartment. For example, the capitalized earnings value method is often used for rented apartments, while the comparative value method is used in particular for owner-occupied apartments and houses.

LUKINSKI News >
Property Valuation: Determine market value, valuation and purchase price

Factors Included in the Market Value

The fair value of a property is ultimately the selling price obtainable on the market. In practice, however, the market value of a house or apartment is largely based on a realistic assessment of supply and demand: the higher the demand for a plot of land or property and the scarcer the corresponding supply, the higher the market price of the property and thus its market value.

Determine the Value of the Location by Standard Land Value

The position of the object can be determined most easily with the ground reference value. The ground reference values are determined separately for each property in Germany. However, the land value is also only a guideline value, as only the fixed average value is taken into account. The actual characteristics – advantageous and less advantageous – of the specific property are not reflected in the standard land value. The guideline value is a calculated value derived from other land sales. The standard land value plays a central role in the comparative value procedure.

How the Building Value is Determined

For a complete property valuation, the market value of an existing building is taken into account in addition to the land value. The building value is determined by its potential uses. In the case of a rented building, the annual rental income and the maintenance costs to be incurred during the same period are compared. If, for example, only a very low rent can be achieved, for example on the basis of the local rent index, the potential for income from the property is also limited. This is also included in the market value.

Costs of a Valuation

For the calculation, a rough evaluation is first made. The price for the final valuation is therefore, in most cases, based on the estimated value of the property to be valued.

If the value of the property is below a limit of 150,000 Euros, you can expect approximate costs of 1,500 Euros. For luxury real estate or multi-family houses with a real estate value of more than 1 million, the estimated fee rises to 3,000 Euro.

  • Below 150,000 Euro value, approx. 1,500 Euro

Source: Federal Association of Experts

What Counts in the House Evaluation

For buildings that are not rented, the following criteria are included in the house evaluation in addition to the land value:

  • Equipment
  • Quality of construction

Construction quality and condition of floor coverings, bathroom, kitchen and roof are also criteria for determining the market value. Further special equipment characteristics, which differentiate the object from others in the neighbourhood, like a fire-place, the beautifully put on garden, winter gardens, soil heatings, a swimming pool or safety and Smart technology affect the price determination. Residential properties also become interesting due to large and modern bathrooms and regular renovation measures.

LUKINSKI News >
Investment Brochure: Buy Real Estate Special - Germany & USA

Asset Value Method: this is How the Net Asset Value is Calculated

In contrast to the market-oriented determination of comparative values, publicly appointed or sworn appraisers calculate the net asset value of the property using the real value method. Only the standard land value and the production costs of the property are taken into account. However, you can also rely on the determination of the best possible purchase price in a valuation by the Lukinski real estate agents. We know which locations and features are particularly sought after in Rhineland-Palatinate and Hesse. When determining the purchase price, we took into account the current situation on the real estate market. Our valuation procedure allows exact conclusions to be drawn about the realizable market value of your property. The comparative value method used does not focus on the material value of the property, but on the selling prices that similar property offers in comparable locations actually achieve.

Always Important: Energy Efficiency

The seller is legally obliged to present the interested party with an energy certificate of the apartment or building. A small energy requirement is an extremely looked for characteristic with real estates and affects favorably the real estate evaluation. Thumb formula: The higher the energy efficiency, the lower energy costs (heating, electricity) for the buyer. Meanwhile also ideal reasons play a large role with the energy efficiency with the real estate purchase: For the climatic change modern real estate customers want to be responsible only in as small a measure as possible.

Creating Added Value: Extensions, Conversions and Renovations

Renovations or conversions that contribute to increasing the living comfort, quality and equipment of the property can additionally increase the value of the property. Save the invoices for renovations and, if possible, submit them already during our online evaluation. The professional installation of the swimming pool, for example, with details of price, year of construction and components used, will convince future buyers of the added value of the property.

In the condition of the property, the windows, roof and façade are in the foreground. If, for example, an outdated or outdated installation has been replaced by renovations, the value of the property is certainly increased. Appraisers also consider the factors relating to the condition of the property under the term “renovation backlog”: What costs can the future owner expect to incur in subsequent years? New and energy-saving heating systems, renovated bathroom fittings, door handles or additional thermal insulation are further measures that enhance the value of a property

Submit an Extract from the Land Register

The extract from the land register contains past and present events concerning the property and its development: When was the property owned by whom, which buildings were erected or changed on which date? The land registry at the local district court administers all land registry entries in the region and provides the owner with an extract from the land register on request.

LUKINSKI News >
Marketing: Sales Talk, Telephone Talk and Psychology - Starting your own Business Part 13

Lukinski Realtor-Tip: If you wish, we will gladly obtain the land register extract for you to speed up the sales process.

Rental Agreements are Included in the Valuation

Usually not rented real estates can be marketed more easily, because many buyers would like to move in even into the new house, the bought dwelling. If objects are rented, the sales proceeds are therefore somewhat smaller under these circumstances. For capital investors however the letting status of a dwelling is again very crucial with the purchase intention.

Very important for the property valuation of rented properties are the existing rental agreements. If the potential buyer can achieve a return by purchasing the property, a rented residential property may well be of interest to investors and increase the price. The rental agreements provide information on how long the tenants have already lived in the house or apartment and how high the monthly net rent is. The Lukinski experts use the capitalized earnings value method to determine how the purchase of a rented property actually pays off.

The Final Purchase Price

Regardless of the valuation procedure, the purchase price is ultimately influenced by market events. From the buyer’s point of view, the currently demanded purchase prices seem too high to many. The salesman however has a substantial advantage with the current development of the real estate prices: by the – depending upon situation naturally – at present attainable prices many owners of real estate can sell their objects at present clearly over the actual market value.

Also we, the real estate experts of Lukinski cannot escape this trend. Our evaluations for objects in Rhineland-Palatinate and Hessen are nevertheless based on solid columns. With many years of experience in the valuation of a wide variety of properties, we can provide very reliable figures and price ranges at very short notice and with only a few details. We determine the optimum of market value and market situation in order to achieve the best possible price within the time frame you have in mind.

Since we keep our customer data available to many interested parties, your buyer may already have been found. Contact us, we will be happy to help you sell your house, apartment, company building and land.