There are lots of reason for real estate valuation. The value of an object is often to be determined when the sale is planning. The real estate value is used to determine the selling price and a negotiating basis. Furthermore, a determination of the value is necessary in legal disputes (divorce proceedings, inheritance, etc.). For example, a determination of the current market value is necessary in order to determine the gain in the case of a divorce.
In addition, a real estate valuation would help with:
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Engineer & Experts office Heid
Heid property valuation
German Experts & Experts Association Engineering Chamber BW
VDI, Association of German Engineers
A real estate evaluation is largely based on comparisons. The key question is: what prices have been paid for similar buildings in a comparable situation?
At first, the market value of the property must be determined. Three methods are available for this purpose: the comparative value method, the material value method and the value method. Sometimes it is helpful for commission the construction of a construction site. In some cases is also necessary for a land-use planning.
The real estate market provides information on the property price development of recent years and provides information on current market developments. In addition, it helps to estimate future development trends: should I still wait with the purchase of the real estate, because a decline in prices is expected, or should I rather buy it immediately, since price increases are foreseeable? We will explain how to calculate the value for a house and which criteria you should consider when you need to buy a house.
The market of value is a central basis for determining the purchase or sale price of an object. Even if the real estate is to be lent for financing purposes, an expert must ascertain its market of value, because credit institutions determine the maximum loan value. The loan price represents the basis for the loan maximum, while the fair value is used to check whether the purchase price is appropriate.
The final purchase price differs in many cases from the market of value as the selling prices for real estate are usually negotiated on a negotiated basis. Therefore, the knowledge of the traffic value is of great importance in order to be able to evaluate the state of the object realistically. An independent expert performs well in the preparation of a commercial value report.
The current market value of a real estate is determined on the basis of the current market situation and the property value of a real estate. A real estate expert evaluates: the building, the land and the outdoor facilities are currently worth are there. Building and development costs are also included in the calculation. Potential buyers are continuously monitoring the market situation and comparing different houses, even if no object resembles another. And although these differ only marginally from one another, the prices can vary considerably.
The following factors influence the price of a real estate:
The current market value or a market value of a real estate is determined on a key date using a building value calculation. Implementation requires comprehensive legal, business and construction expertise.
A qualified expert or a company is professional with real estate or property evaluation. In Germany there are three standardized methods of valuation, which are regulated by the legislation. The law ensures a comparability of the real estate valuation on the basis of the law.
The following three methods for determining the building value can be distinguished:
The most accurate method to determine the value of real estate or real estate is the comparative method. It is suitable for the determination of the market value of owner-occupied apartments and makes the market situation most realistic compared with the other two methods.
The basic principle of the market is easy to understand: the value of a real estate depends on how much others are willing to spend on it. Not only are the production costs of the property taken into account. The value of a high-quality building is reduced if no buyer is found who wants to pay a reasonable price according to the construction costs. Conversely, a house with a high demand can achieve a price that exceeds the cost of production. The best practice is the comparative method.
The method compares a sufficiently large number of objects that have many matches. An expert uses a latent purchase price collection from the review committees. He requires professional competence and sufficient experience to be able to adequately assess the comparative values and their relevance for the real estate value.
For land, other criteria such as, such as the
Owners often appreciate quality of their real estates but they underestimate the price effects of the location and building. Investments which extend the remaining useful life of the property (energy-saving renovations such as facade insulation) have a positive effect on value. Equipment details (flow, floor coverings, etc.) have a rather minor influence on the price. The comparative value method is a reliable and easy-to-understand method, in which the property value is optimally aligned with the market level. However, it reaches its limits when comparison parameters are missing and particularly complex or unusual buildings are to be evaluated.
The value method is the most common but also it is the most complex method for real estate valuation and can only be applied correctly by experts. In 2012, the Federal Ministry of Building has published a 47-page "Property Directive", in which all factors affecting the value of the property are named and related to each other.
The material price is calculated on the basis of the following three components:
1. The land value (cost of land)
2. General costs of the property
3. General costs of the outdoor installations (paths, garages).
The land value (cost of land) is determined by the local expert committee. For this purpose, the selling prices are used in the respective situation. According to the above-mentioned directive, the type of building (the presence of a cellar or an attic) and, on the other hand, the quality of the individual components (roof, exterior walls, windows, doors, sanitary installations etc.) plays a role. From these two positions, the so-called rule production costs of the object per unit of area are calculated using a complex model, which can vary widely depending on the standard. Various remediation measures or special equipment features can be taken into account via various tables. The next step is to include age impairment. According to the legislature, the total useful life of condominiums and detached houses is 80 years, with an annual value reduction of 1.25 per cent. If the corresponding percentage is deducted from the building production costs, this results in the building value. The land value price is then added to this.
The result is the preliminary material price, which is finally multiplied by the market adjustment factor. This factor, which is calculated by the expert committees, takes account of the conditions of the local real estate market.
The material value method as an objective method for determining the value of a property is mainly used in the case of one-family houses, two-family houses and owner-occupied flats. At the same time, it is the only method which is also suitable for the determination of industrial values (railway stations).
The lack of data base for modern house types has a disadvantage. Moreover, this method makes it difficult to model the market. In spite of the market adjustment factor, experts are often unrealistic values, which do not correspond to actual prices.
In the case of the value-based method, the calculation of the value of a building is based on the shed-off yield. The method of calculation is applied when the primary purpose of a property is to achieve profitability. Objects with a rental agreement (especially multi-family houses) and commercial properties (eg hotels) are valued using the earnings method, since different rules apply here than for self-used real estate. In the case of rented buildings, the investor is faced with the central question as to which yield can be achieved over a long period of time.
Five factors are decisive for the earnings value method:
1. The land value: the land value is the basis of the calculation as in the case of the asset valuation procedure. It is calculated from the soil value per square meter determined by the expert committee and from the area.
2. The real estate interest: it indicates the percentage of the market interest rate of real estate. The guideline value for residential real estates is five percent. The value of the land is only the value of the land, since the building itself wears off, so that income can only be achieved over a certain period of time. However, the property itself is a value independent of it.
3. The income and maintenance costs: for the landlord, the gross yield, the annual rent, which the property enters, is an important quantity. The decisive factor is not necessarily the actual rent, but the commercial rent. The gross operating income is subtracted from the management costs (expenses for administration and maintenance) which can not be converted to rent. The result is the net profit.
4. The duplicator: this is a central parameter for calculating the yield value of a real estate without the land value. The multiplier results from the multiplication of the real estate interest rate and the remaining useful life. Consequently, the duplicator also increases with the latter.
5. The structural condition: this factor also has an influence on the yield value of an object. Important questions are whether the building is in a neat state and whether it has been renovated. The assessor shall determine the sum to be applied for this purpose.
The income value method is a practical method of calculation which is based on the real figures of the rental. However, the earned value is substantially dependent on the real estate interest rate and sufficient data must be available for its calculation. In the case of strongly rising rental prices, it is also possible that the actual value is above the calculated earnings value, since the gross profit can only represent the past.
Real estate mirrors represent the current price development of real estate in a certain city or municipality. These are the average values of regional real estate purchases, which provide an orientation on the market. Houses are becoming more and more popular in Germany, which means that average house prices are rising. According to experts, this upward trend will continue in the coming years.
Various providers (associations of the real estate industry) analyze market data and publish it in a real estate mirror. The presentation of the development of real estate prices is presented in a clear, usually tabular form. Because price developments can vary enormously regionally, real estate mirrors are also made for individual federal states or large cities.
Not only real estate brokers use the reports as a guide. Interested parties can also get information about rental and purchase prices with their help. One advantage is that the reports, in addition to current data, also represent trends, so that market developments can be prognosticated. Real estate mirrors are a useful tool for real estate valuation as market indicators. However, the assessment should not be based solely on these documents, as the stated regional mean values are not relevant for all objects. In the case of property evaluation, specific aspects such as the condition and location of the building play an important role. Therefore, an individual analysis of the corresponding property is required.
Many owners are asking themselves: whether they should hire an appraiser to value of their real estate, or whether estimation through online real estate valuation. The evaluation via an Internet portal gives a first impression of the value of the object. This is relatively fast and uncomplicated. The online market evaluation provides a helpful basis for initial negotiations with buyers, brokers, banks and insurance companies. In some cases, however, a thorough assessment of the property value by a qualified expert is indispensable.
An online real estate evaluation and an expert opinion differ in a central aspect:
An expert's traffic report provides a more comprehensive analysis that takes into account detailed aspects of your property. An expert checks each property individually. He pays attention to details that sometimes do not even catch the attention of the owner. In his analysis, he takes into account structural and equipment-related characteristics of the property, necessary investments, value-bearing rights as well as burdens from the land register and the local real estate market.
In some cases, an expert evaluation of the property value is indispensable. In other situations it may already be sufficient to use comparative offers. Especially in situations where the value of the real estate is legally relevant (in the event of litigation or legal proceedings), the expert's opinion of a sworn expert is required.
In principle, an appraisal by an expert is useful in the following cases:
As usual online valuation of real estate is sufficient in cases:
Especially if you have lived in the building you want to sell for a long time, there is a great emotional bond with it. Even if in the case of succession the sale of the house or apartment of close relatives is pending, an objective assessment of the property value is usually difficult. Experts or online portals can help determine the actual price of an object.
An independent evaluation is important for the real estate owner, as unrealistic pricing can have financial consequences. Objects that are offered for too long on the market are bad for brokers such as potential buyers. The negotiating position of the seller is thus weakened and sometimes the house must ultimately be sold under value. The research by the savings banks of the district Koln shows that the sale of a property is delayed by overpriced price requirements. If the value is 20 percent, the time to sale is often more than one year. In addition, the proceeds then fall below the actual value by 15 percent. However, if the sales price is only five percent higher than the real property value, sales are often completed after two months. In addition, in this case, a sales price is usually obtained which corresponds to the actual value of the object.
Further advantages of a property evaluation for the owner are:
A broker should have extensive knowledge of the local and regional real estate markets. However, a professional property valuation is also recommended for experts, if, for example comparison with other objects is impossible.
An estate valuation has the following advantages for estate agents:
For an inexperienced buyer, as usual is difficult to estimate the market value of a property in a realistic way. A comparison of prices in the market environment is important, as the prices between individual urban areas usually vary considerably. As attractive real estates are sold quickly, decisive action is crucial.
A real estate valuation can help the buyer as follows:
If you want to offer your house for sale, you need to know the market value in order to determine a reasonable price. Determining the right price is not a simple matter for real estate sellers. If you set the purchase price too high, you will make scared potential buyers and would never sell your real estate. If you demand too little, you sell quickly, but would lose lots of money.
Mistakes in price determination arise if you do not know the market price of your real estate or misjudge it. Therefore, it is important to carry out a calculation of the value. This enables you to commission a qualified appraiser or, alternatively, to assess the value of the building by means of your own research. If you are well-informed from the outset, sales negotiations will be easier.
The basis for a property valuation is comparisons. You should therefore inform yourself about the prices at which similar objects are sold in a similar situation. Set up market surveys by reading newspaper advertisements, studying property pages on the Internet, and analyzing exposes of brokers. The situation decisively influences the value of a property. A helpful overview provides ground maps, which are available on the Internet for a small fee.
As a first experience you can carry out an online real estate evaluation. However, this does not constitute an equivalent substitute for the individual valuation of an expert. The latter should be used if you lack the time for analyzes or you want to sell a house that has an individual construction or exceptional equipment. Once the value of the real estate is determined, you should include a surcharge of up to 10 percent. This makes sense, since price reductions in the real estate business are customary. Alternatively, you can request the value of the traffic, but you can add extra charges for equipment extras (fitted kitchen, sauna, etc.). In the sales negotiations you should be well prepared. Note down the strengths of the property that you offer for sale. Make sure you have convincing arguments and put yourself in the position of the interested parties to be able to assess possible counter reactions.
A house is not bought every day. This makes it all the more exciting when a real estate purchase is at the doorstep. To end up not paying too much for your dream home or apartment of your desires, some preparations are to be made. Do not be tempted to make hasty decisions. Such a large investment as a real estate purchase should be well considered. Market surveys and a real estate valuation help you to assess whether the actual price corresponds to the real value of the property.
Before you start looking for an object that meets your expectations, you should be realistic about your financial leeway. After all, it does not matter very much if you have found your dream home, but this is going to blow your purse far.
In the beginning, a real estate market must be explored to get an overview of offer and prices. According to experts, it is useful to make market surveys for at least half a year before buying an item. Study the latest real estate listings in newspapers or on the Internet. Also consulting in broker offices or at credit institutes provides a good overview of the market situation.
In doing so, you should pay attention not only to the size, equipment and the general condition of the properties houses. Location factors such as good transport connections, sufficient shopping facilities and green spaces in the surrounding area are also crucial for the price. With the help of land value maps of the municipalities, you can get information about inexpensive and expensive areas. In addition to the location, the real estate orientation and structure as well as the possibility of altering the building play an important role. You can find out how far you can build or expand the building.
If you have selected a desired property in the narrow selection, online evaluation gives first indications for the assessment of whether the required price is appropriate. The average market value of comparable objects is calculated. However, an expert opinion does not replace the tool on the Internet, since specific characteristics of the real estate can only be considered to a limited extent. If a visit is required, it is advisable to bring an expert who assesses the condition of the building on site.
The valuation of an expert is a good basis for negotiations. However, the calculated market value indicates the possible market value only in an approximate way. With some negotiation skill, the property can be purchased at a price that is 10 to 20 percent below the market value. In the case of coveted objects, however, a 10% surcharge is not a rarity.
Competent local experts, who can accurately assess the market, achieve higher selling prices. In addition, you benefit from our streamlined and efficient process flows. We gladly pass on the resulting price advantages to our customers.
The price of a report depends on the size and complexity of the object. In addition to the living space and floor space, the type of property (for example residential, commercial or special property) also influences the costs of the appraisal. The cost of obtaining documents that are not available to the owner must also be considered. Inform yourself cost-free and without obligation!