Are you planning to sell your property or dealing with an inheritance and wondering what your house is really worth? A well-founded valuation strategy is crucial for private owners to avoid financial disadvantages and achieve the best possible price. Discover how to proceed systematically.
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The topic briefly and concisely
A well-founded valuation strategy is crucial for private property owners to avoid financial disadvantages; the ImmoWertV and the BauGB form the legal framework.
The three main valuation methods are the comparative value method, the cost value method, and the income value method, whose application depends on the type of property and the reason for the valuation.
Important value factors include location, condition, features, and legal aspects; in the event of inheritance, an appraisal can help optimise the tax burden.
The value of a property is not a fixed figure, but the result of a careful analysis of numerous factors. For private individuals, understanding the correct valuation strategy is essential, whether selling a home, dividing an inheritance, or assessing one's own assets. Without a clear strategy, you risk misjudging your property's value by up to 15%. This article guides you through the established procedures and shows you how to create a solid basis for your decisions. Discover the available methods, which factors significantly influence the value, and when professional support is advisable to achieve your goals.
Fundamentals of Property Valuation: Why a Strategy is Crucial
Evaluating a property is often more complex than anticipated. Many private owners underestimate the multitude of factors influencing value, which can lead to misjudgments averaging 10-15% of the market value. Developing a well-thought-out private evaluation strategy is therefore not a luxury, but a necessity. It serves as a foundation for sales negotiations, inheritance settlements, or loan discussions with banks. Without it, you're navigating blindly. The Property Valuation Ordinance (ImmoWertV) and the Building Code (BauGB) form the legal framework for the three central valuation methods in Germany. Understanding these basics protects you from costly mistakes and enables a realistic value assessment. Our guide to the first step of valuation can provide initial orientation. Choosing the right method is an important first step.
The three pillars of valuation: An overview of the methods
In Germany, three standardised methods for property valuation have been established, which are used depending on the type of property and the valuation purpose. Understanding these methods is the core of any successful private valuation strategy. For owner-occupied houses and condominiums, the comparative value method (§ 15 ImmoWertV) is often the first choice. This involves using actual purchase prices of comparable properties from the recent past. If there are not enough comparable properties available, or if it is a special type of property such as single-family and two-family houses that are rarely traded, the asset value method (§ 22 ImmoWertV) is often used. It determines value based on the building's construction costs and land value. For rented properties where the focus is on yield, the income value method (§ 17 ImmoWertV) is key. It is based on future expected rental income. You can find more about the individual methods and their application in our article on effective valuation strategies. The correct application of these methods requires market data and expertise.
Comparative valuation method: The market sets the tone
The comparative value method is considered particularly close to the market and is therefore often used for the valuation of privately used standard properties such as condominiums and terraced houses. The logic is simple: A property is worth as much as is paid for comparable objects on the market. Expert committees collect anonymised data from real purchase contracts and publish comparison factors or standard land values (§ 196 BauGB). For precise application, at least 3-5 similar objects must be used. Important comparison criteria are:
Location (micro and macro location)
Size (living space and plot area)
Year of construction and construction method
Equipment and condition
Energy characteristics
Legal conditions (e.g. heritage protection)
The challenge lies in creating genuine comparability and correctly taking deviations into account through premiums or discounts. Online property valuations often use this method, but cannot always replace detailed analysis by experts, especially for individual properties. However, an initial assessment of what your house is worth can be helpful. This method is transparent but reaches its limits with unique properties.
Capital Value Method: Focus on Substance and Production Costs
When there are no or insufficient comparable values for a property, the cost approach becomes the focus of the private valuation strategy. This is often the case with detached single-family homes, special-purpose properties, or in rural areas with low transaction density. The approach determines what it would cost to build the property anew today and deducts the depreciation due to age. The calculation takes place in several steps:
Determination of the land value (usually using standard land values).
Calculation of the normal construction costs (NHK 2010 or current) for the building, based on building type and standard of fittings.
Adjustment of construction costs to regional building prices (construction price index).
Determination of the building's depreciation due to age.
Consideration of special property-specific land characteristics (e.g. building defects or above-average fittings).
The preliminary real value results from the sum of the land value and the building's real value. This is then adjusted to the current market situation using a real value factor (market adjustment factor) provided by appraisal committees. A benefit is the transparency of the individual calculation steps. For a detailed breakdown, read our valuation guide. Next, we will consider the method for investment properties.
Income approach: What does the property yield?
For investors and when evaluating rented or leased properties, the income approach is the method of choice. It poses the question: What sustainable income can the property generate? This approach is central to a private valuation strategy when dealing with apartment buildings, residential and commercial properties, or commercial real estate. Here, the value is primarily derived from rental income. The calculation is complex and typically includes the following steps: Determining the annual gross yield (usual annual rent). Deduction of non-recoverable management costs (administration, maintenance, rental loss risk) results in the net yield. Determining the land value and its interest (real estate interest rate). The remaining building yield is capitalised over the remaining useful life of the property. The present value of the building yield plus the land value equals the income value. Crucial for a realistic result is the correct assessment of the sustainably achievable rent and the property-specific real estate interest rate. This rate reflects the investment risk and is derived by expert committees. A careful valuation when selling a house is particularly important here. But what factors influence the value beyond the methods themselves?
Value-Influencing Factors: More than Just Square Meters and Location
Regardless of the valuation method chosen, there are several factors that significantly influence the value of your property and must be incorporated into every private valuation strategy. The location is often the most important factor, divided into macro-location (region, city) and micro-location (immediate surroundings, infrastructure). Good access to transport, schools, and shopping facilities can increase the value by up to 20%. The structural condition, including age, building substance, energy condition (e.g. insulation, type of heating – documented in the energy certificate), and any renovation backlogs, play an equally significant role. The features – from the quality of flooring to modern bathrooms to a balcony or garden – also affect the price. A modern layout and diverse usage options can further increase the value. Legal aspects such as listed building regulations, registered rights of way, or building encumbrances can, however, reduce the value. An overview of necessary documents for the valuation, such as the land register extract or building plans, is essential here. These factors need to be carefully analyzed.
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In the event of inheritance, property valuation holds special significance, as the determined value forms the basis for inheritance tax. The tax office usually determines the so-called common value (market value) using standardised procedures. This valuation does not always correspond to the actual market value and can be disadvantageous for heirs. A well-considered private valuation strategy is therefore very valuable. Heirs have the right to prove a lower market value, for example, through a qualified expert opinion or a timely sale (within one year of the inheritance) at a lower price. For rented residential properties, the legislator grants a valuation discount of 10% under certain conditions. Burdens such as usufruct or right of residence also reduce the taxable value. It is advisable to early on consider whether the appointment of an independent surveyor is sensible to optimise the tax burden. Especially with communities of heirs, a neutral valuation helps to avoid disputes. The complexity in the event of inheritance underscores the need for professional advice.
Costs and Benefits: When is a professional appraisal worthwhile?
What is a Private Property Valuation Strategy?
A private property valuation strategy is a systematic approach used by private owners, heirs or buyers to determine the realistic market value of a property. It involves selecting appropriate valuation methods and analyzing all relevant value factors.
Why is a Professional Property Valuation Often Better Than a Purely Online Estimate?
Professional valuations by surveyors or experienced analysts, such as those at Auctoa, take into account individual property characteristics, current market data, and perform a more detailed analysis than standardized online tools, leading to more accurate results, especially for complex or unique properties.
Can I Value My Property Myself as a Layperson?
Yes, you can make an initial assessment by using online calculators and researching the sale prices of similar properties in your area. However, for a precise and reliable valuation, especially for important financial decisions, expert knowledge is often required.
What Documents Do I Need for a Property Valuation?
Important documents include the land registry extract, building plans (floor plans, sections, elevations), a calculation of the living area, the energy certificate, proof of modernizations and, for condominiums, the partition declaration and minutes of owner meetings.
How Can Auctoa Help Me with My Valuation Strategy?
Auctoa supports you with AI-assisted property valuations and the interactive ImmoGPT chat. We provide you with fast, data-driven, and objective value analyses that help you develop an informed valuation strategy and optimize your property decisions.
Does the Energy Condition Strongly Influence the Property Value?
Yes, the energy condition (e.g., quality of insulation, type of heating, condition of windows) has a significant impact on the property value. A good energy condition can increase the value by 5-15% and is an important selling point.
Additional useful links
The Federal Statistical Office offers current data on house prices and building land in Germany.
The Federal Ministry of Finance provides comprehensive information on inheritance and gift tax in Germany.
The Deutsche Bundesbank provides an indicator system for the residential real estate market.
The Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) offers information on housing and real estate markets.
The official portal BORIS enables access to official land value information in Germany.
The Banking Association provides insights into the perspectives of the German credit industry on the real estate market and financing issues.
The Ifo Institute publishes surveys from economic experts on expected developments in house prices.
FAQ
What is a private property valuation strategy?
A private valuation strategy for real estate is a systematic approach used by private owners, heirs, or buyers to determine the realistic market value of a property. It includes selecting appropriate valuation methods and analyzing all relevant value factors.
Why is a professional property valuation often better than a mere online estimate?
Professional evaluations by appraisers or experienced analysts like those at Auctoa take individual property features and current market data into account and conduct a more detailed analysis than standardized online tools, leading to more accurate results, especially for complex or unique properties.
Can I evaluate my property myself as a layperson?
Yes, you can make an initial assessment by using online calculators and researching the selling prices of similar properties in your area. However, for an accurate and reliable valuation, especially for important financial decisions, expert knowledge is often required.
What documents do I need for a property valuation?
Important documents include, among others, the land register extract, building plans (floor plans, sections, elevations), a calculation of living space, the energy performance certificate, proof of modernisations, and for condominiums, the declaration of partition as well as the minutes of the owners' meetings.
How can Auctoa help me with my review strategy?
Auctoa supports you with AI-powered real estate evaluations and the interactive ImmoGPT chat. We provide you with fast, data-driven, and objective value analyses that help you develop an informed assessment strategy and optimize your real estate decisions.
Does the energy condition strongly influence the property value?
Yes, the energy efficiency (e.g., quality of insulation, type of heating, condition of the windows) has a significant impact on the property's value. A good energy efficiency can increase the value by 5-15% and is an important selling point.
