Avoid costly mistakes: 5 mistaken market assumptions that jeopardise the value of your property
Do you believe you know the true value of your property? Many owners rely on outdated assumptions and end up losing real money. This article debunks the five most common and costly market misconceptions and shows you how to avoid them.
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The topic briefly and concisely
Offer prices on portals are not market values; the actual sale prices are often 6-21% lower.
The energy condition nowadays is as important a value factor as the location and can influence the price by over 20%.
Emotional attachments lead over 50% of owners to an unrealistic overvaluation of their own property.
Do you recognise the feeling that your property should be worth more than the bare numbers suggest? This assumption is one of the most common causes of financial losses in sales or inheritance matters. Incorrect market assumptions, often fuelled by emotions or outdated information, lead to inflated price expectations or underpriced sales. In a market environment that has changed significantly since 2022, data-driven decisions are no longer a luxury but a necessity. We show you which thinking errors you need to avoid and how an objective analysis reveals the true value of your property.
Myth 1: Using offer prices as reliable market values
One of the most common misconceptions in the market is equating listing prices on real estate portals with the final sale price. The reality is different: the actual sale price often falls significantly below the original listing. Studies show that the difference between listing and purchase prices can range from 6% to 21%, depending on the region. Setting a price too high deters serious buyers and results in a property lingering on the market for months, further diminishing its appeal. Some real estate agent statistics even indicate that an unrealistically high starting price can eventually lead to a sale price that is 11% lower. A professional valuation, based on real transaction data, is therefore the only reliable foundation. Learn more about common valuation mistakes in our blog. This discrepancy highlights why a data-driven analysis is essential for realistic pricing.
Assumption 2: Location alone determines property value
The principle of "Location, Location, Location" is not incorrect, but it is incomplete and often leads to misjudgements. Nowadays, the energy condition of a property is an equally decisive value driver. A property with a poor energy efficiency rating (e.g., G or H) can suffer significant price reductions of up to 20% or more, despite being in a good location. Buyers consider the up to 50% higher ongoing costs and potential renovation obligations mandated by law. Banks have started incorporating energy efficiency into their financing decisions and offer better terms for properties with ratings from A+ to C. Focusing solely on the address is a dangerous simplification that ignores the growing importance of sustainability and operating costs. Therefore, how to minimise valuation uncertainties is a central question.
Error 3: Ignoring macroeconomic trends like interest rates
The property market does not exist in a vacuum; it is significantly influenced by the overall economic situation. A widespread market misconception is to underestimate the impact of interest rates, inflation, and political regulation. The shift in interest rates since 2022 has drastically increased financing costs for buyers and altered demand. Although mortgage rates stabilised between 3.4% and 3.8% in 2024, affordability remains a hurdle for many households. Forecasts for 2025 point to moderate price increases of two to four percent, driven by energy-efficient properties in urban locations. Anyone having a property valued today must take these external factors into account, as they directly limit the market's willingness to pay. The consequences of outdated valuations can be significant.
Danger 4: Emotional attachment distorts objective evaluation
The emotional attachment to one's home is the greatest obstacle to an objective assessment. Sellers tend to overestimate the value of their property because they factor in personal memories and the effort invested—factors that are irrelevant to a buyer. This phenomenon, also known as the 'endowment effect', leads to approximately 53% of owners setting the value of their property too high. Such miscalculations can deviate by up to 30% from the actual market value and can hinder the sales process. An impartial, data-driven perspective from outside is essential to avoid these psychological pitfalls. An objective analysis separates fact from emotion and protects you from the financial disadvantages that arise from under- and overvaluation.
Consequence: How false market assumptions lead to financial losses
Clinging to false market assumptions has tangible financial consequences. A price set too high does not lead to a higher yield, but rather to a longer and ultimately more costly sales process. A property that remains listed for too long loses credibility, often resulting in price reductions below the actual market value. Conversely, underestimating the value, perhaps due to a lack of awareness of value-enhancing features such as a good energy rating, results in a direct financial loss. An accurate AI-powered valuation, like the one offered by Auctoa, eliminates these risks. It provides you with an objective, data-driven basis for your decisions. Chat now for free with our ImmoGPT to get a first appraisal and avoid costly mistakes. Because only a correct valuation ensures you achieve the best possible yield.
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Additional useful links
Statistisches Bundesamt provides detailed data on house prices and building land in Germany.
Deutsche Bundesbank offers an indicator system for the housing market.
ifo Institut analyses the current situation in residential construction.
PwC publishes reports on emerging trends in the real estate sector.
EY provides a trend barometer for the real estate market in 2025.
Wikipedia offers a comprehensive overview of real estate bubbles.
Umweltbundesamt provides information on energy-efficient buildings.
Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR) provides forecasts for the housing market.
FAQ
What are the biggest risks of incorrect market assumptions?
The biggest risks are financial losses. Setting the price too high results in long marketing times and ultimately lower sales proceeds. Setting the price too low means you're giving money away. Both undermine your financial position.
How can I obtain a realistic property valuation?
A realistic valuation is based on current transaction data, taking into account location, condition, and above all, energy efficiency. Use professional AI-powered tools like those from Auctoa, which use objective data instead of emotions or outdated assumptions.
Does the condition of the property play a greater role than before?
Yes, absolutely. In addition to the energy efficiency, buyers are increasingly focusing on the general need for modernization. Outdated bathrooms, windows, or heating systems are seen as direct cost factors and are taken into account in the purchase price.
How current must the data be for an assessment?
The real estate market is very dynamic. Data older than three to six months may already be outdated, especially during times of fluctuating interest rates. An evaluation should always be based on the most up-to-date market data available.
Why is a neutral evaluation particularly important for heirs?
In an inheritance community, there are often different interests and emotional ties. A neutral, data-based assessment by a third party like Auctoa creates a fair and unquestionable basis for all decisions and prevents conflicts.
Can I increase the value of my property through small renovations?
Yes, but not all renovations pay off. While an energy-efficient renovation significantly increases value, purely cosmetic changes (such as a luxury kitchen) are often not fully rewarded by the market. It's important to invest wisely.
