Are you facing a property sale or inheritance and wondering what the correct first step in an appraisal is? The answer is less obvious than many assume. Discover how setting the right course at the beginning can optimize the entire process and lead to a valuation up to 15% more accurate.
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The topic briefly and concisely
The very first step of a property valuation is defining the reason (e.g. sale, inheritance), as this determines the method and scope of the appraisal.
The complete provision of 7 key documents such as land registry excerpts and building plans can speed up the valuation process by up to 3 weeks.
The reason for the valuation determines whether the comparative value, income value, or intrinsic value method according to ImmoWertV should be applied to determine an accurate value.
What is the first step in an appraisal? Many owners immediately start looking for the land registry excerpt or contact an appraiser. However, the strategically crucial first step happens beforehand: accurately determining the reason for the appraisal. Whether it's for a sale, tax assessment by the tax office, or asset division during divorce – the purpose defines the method, scope, and necessary documents. Setting a clear goal from the outset prevents delays of up to three weeks and ensures that the appraisal is legally sound and optimized for your purposes.
The true first step: Why the reason for evaluation decides everything
The most common mistake in planning a property valuation is the assumption that the process begins with data collection. However, the actual first step in a valuation is defining the purpose (valuation occasion). An appraisal for the tax office in the event of inheritance is subject to different legal requirements than a market value estimate for sale. For example, the tax office often requires a demonstrably lower market value to reduce inheritance tax, while a bank requires a sustainably achievable value for a loan. Therefore, defining the objective is not a formality but the strategic foundation that guides the entire Auctoa valuation process. An unclear objective can lead to an appraisal that is unusable at a crucial moment and has incurred costs of over 1,500 Euros. Clearly defining the purpose ensures that the correct valuation method according to § 194 BauGB is applied. This crucial first step lays the foundation for all subsequent phases.
Laying the Foundation: These 7 Documents Are Essential
Once the purpose of the evaluation has been clarified, the second operational step follows: compiling the necessary documents. Missing documents are the most common cause of delays in the evaluation process and can postpone completion by an average of three weeks. A complete set of documents forms the basis for a smooth path to a reliable appraisal. The following documents are required for 95% of all evaluations:
Current land register extract: It must not be older than three months and provides information about ownership and encumbrances.
Extract from the cadastral map/site plan: Shows the exact location and boundaries of the property.
Construction plans and floor plans: Scaled drawings (often at a scale of 1:100) are essential for area calculation.
Living space and usable area calculation: A detailed breakdown of areas according to the Residential Space Ordinance (WoFlV).
Building description and building permit: Documents the approved construction method and materials used.
Energy certificate: Mandatory since 2014 for sale and rental, it provides information on energy efficiency.
Evidence of modernisations: Invoices from the last 10-15 years can significantly increase the value.
Proactively obtaining these documents not only speeds up the process but also enables a more accurate initial assessment. With tools like our ImmoGPT-Chat, you can quickly determine which documents are relevant for your specific case. From here, it moves directly to the on-site analysis of the property.
The Site Inspection: Where Data Becomes Reality
The on-site inspection is a critical milestone in the evaluation process, where the previously collected data is verified. A professional appraiser invests at least 60 to 90 minutes to gain a comprehensive understanding. During this time, not only are obvious features such as layout and amenities examined, but also the building's structural condition, any potential defects, and the overall state of preservation. Hidden defects uncovered here can reduce the final market value by up to 20%. The inspection documents the condition of the roof, facade, windows, and heating system – all central factors in property valuation. This direct assessment is essential for making a realistic valuation and not just judging based on documentation. The insights gained from the inspection build the bridge to selecting the appropriate valuation method.
Choosing the Right Method: An Insight into Methodology
Based on the valuation occasion and the property data, one of three standardized methods of the German Property Valuation Ordinance (ImmoWertV) is chosen. Each method serves a specific purpose and is optimized for certain types of real estate. Choosing the wrong method can result in a deviation from the market value of more than 10%. Here is an overview of the common methods:
Comparative Value Method: This is the preferred method for owner-occupied houses and condominiums in areas with sufficient comparable sales. Here, current selling prices of similar properties are used as the basis for the valuation.
Income Approach: This method is the standard for rental residential and commercial properties. The value is derived from the expected future net rental income (gross income minus management costs).
Cost Approach: This is used for unique, owner-occupied properties for which there are no comparable properties. The value is derived from the building's construction costs and the land value, minus age-related depreciation.
The correct application of these methods requires in-depth market knowledge and is the final analytical step before the creation of the final report.
Conclusion: A precise start for a reliable result
The first step in an evaluation is not operational hustle, but strategic clarity. By precisely defining the reason for the evaluation, you lay the foundation for an efficient and accurate process. This focus ensures that the right documents are obtained, the site inspection is conducted with purpose, and the appropriate valuation method according to ImmoWertV is applied. This way, you get not just a number, but a reliable decision-making basis that is precisely tailored to your needs. A well-founded report always begins with the right question: What exactly do you need this value for?
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Additional useful links
Statistisches Bundesamt offers detailed data on construction prices, the property price index, house prices, and building land.
Deutsche Bundesbank provides statistics on property and construction performance prices.
Deutsche Bundesbank offers an indicator system for the residential property market.
BORIS.de is the central information system for standard land values in Germany.
Bundesministerium der Justiz provides the Property Valuation Ordinance (ImmoWertV 2022), which establishes the legal framework for property valuations.
Ifo Institut publishes research results and press releases, such as on expected price developments in the property market.
FAQ
Why is the reason for the review so important?
The occasion (e.g., sale, inheritance, divorce) determines the type of appraisal. A simple market value appraisal for a sale has different legal and content requirements than a fair market value appraisal for the tax office or court, which directly influences the valuation method and level of detail.
Can I perform a property valuation without an estate agent?
Yes, online tools can be used for initial orientation. However, for binding purposes such as inheritance, donation, or submission to a bank, an appraisal by an independent, certified expert is required to ensure legal certainty.
What exactly happens during the site visit?
During the on-site inspection, the surveyor thoroughly examines the property. He documents the condition of the building fabric, the quality of the fittings, any damage or defects, as well as any modernizations carried out. This inventory is crucial for accurately determining the value beyond the mere paperwork.
What costs are incurred for a professional real estate valuation?
The costs vary depending on the occasion and scope. A brief report for pure price determination can start at around 500 euros. A comprehensive market value report according to Section 194 of the BauGB for judicial or tax purposes often costs 1,500 euros or more, depending on the property value and effort involved.
How can Auctoa help me with the first step?
Auctoa helps you clearly define the reason for assessment from the very beginning. Our ImmoGPT chat can provide an initial evaluation of the documents you need. Afterwards, our certified experts create a report tailored to your needs – quickly, data-driven, and objective.
