Heid Real Estate Valuation for Germany

Frequently asked questions relating to our real estate valuation

In this section, we answer frequently asked questions that prospective clients and customers often have before we carry out your property valuation.

What is a real estate valuation?

A real estate valuation involves an expert working out how much your property is worth. The real estate appraiser has to distinguish between two different values depending on the purpose of the valuation:

• The market value:
  Market value is another word for the current value of a property on the market.With this, you can put a number on a property’s possible buying price. However, as the buying price largely depends on current developments on the real estate market (i.e. supply and demand), the market value is a very specific value that only ever relates to the economic and regulatory circumstances under which the valuation was performed. For instance, the market for similar properties may evolve rapidly over two months due to changes in either demand or supply. This means that, in this case, the market value may be higher or lower. If you need information about the market value of your property, a market value report or a brief report would be suitable for your purposes.
• The lending value:
  Real estate appraisers calculate the lending value particularly when companies or private individuals are interested in obtaining a loan and a property is to be used as collateral for this. In this case, the real estate appraiser has to find out the value for which a bank could sell the property in the long term, independently of volatile market fluctuations if possible. The higher the lending value, the less risky it is for a bank to lend. If you need to calculate a property’s lending value, our experts would be happy to write a lending value report for you.

When do I need a real estate valuation?

There may be different reasons for requesting a real estate valuation:

• Property sale: If you would like to sell your property and are intending to do so soon, a real estate valuation by an expert is worth it. This is because a professional report offers you an important basis for negotiations.
• Property purchase: If you would like to buy a property, professional real estate appraisers can give you an accurate estimate of a property’s value during a viewing. They provide you with reliable information about how much the object you would like to buy is actually worth.
• Disagreements on quoted prices: If buyers or sellers are unable to agree on the selling price, a professional valuation creates a transparent and fair basis for negotiations.
• Inheritance and gifting of properties:
  If you inherit a property or receive one as a donation (gift), you have to pay either inheritance tax or gift tax to the tax authorities. However, in most cases you can reduce the tax payment with a market value report.
• Divorce cases:
  In the event of a divorce, a real estate valuation can provide clarity regarding the assets to be split between the two parties, as a property can increase or decrease in value over time. A real estate valuation by a professional expert creates a clear basis for negotiations relating to the equal distribution of accrued gains and enables a fair split by mutual agreement.
• Granting of loans and mortgaging of properties:
  If you would like to take out a loan, the credit institution needs collateral from you. This often takes the form of a property. In such cases, a real estate appraiser calculates the value that the property will be able to achieve in the long term if the loan cannot be repaid. The appraiser documents their findings in a lending value report.
• Reducing the building substance value:
  With a building substance appraisal or a remaining useful life appraisal, experts can demonstrate that the economic remaining useful life of a property may be significantly lower than assumed by the tax authorities. This allows you to increase the depreciation amounts in your tax return.
• Compulsory sale or partition by sale:
  If you as a borrower are bankrupt and are unable to repay your loan in any other way, your property will be sold in a compulsory sale. Furthermore, a partition by sale may also take place if a group of heirs cannot come to an agreement on how to use the property. In this case, the basis for the sale is a market value report, which provides information about the property value.
• Checking the plausibility of other reports:
  If you have doubts about the floor area specified for a property or any other metrics and values given in a report or listing, we recommend that you have this checked by another appraiser.
• Transfer of business assets to private assets:
  If you are giving up your business and would like to transfer it to private assets, the tax payments will depend on the market value of the property. With a sound real estate valuation, you can be sure that you will not pay any more in taxes than you need to.
• Accounting for properties that are held in fixed assets:
  Properties in fixed assets are considered in companies‘ accounting procedures to check the book value of the fixed assets and the asset structure. This is an important indicator for investors. This is why, in such cases, it is essential to have the property reliably valued by an experienced expert.
• Calculating the insured value from 1914:
  The 1914 building insured value is decisive when granting residential building insurance. This is because this value is used by insurance companies to calculate the insured sum and the premiums. If you would like to prevent your building being underinsured, an accurate valuation of the property is indispensable.