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A precise valuation report for your property is crucial, whether for purchase, sale, inheritance, or divorce. But what types of appraisals are available, and what should you be mindful of? Avoid costly misjudgements and secure the best price. Do you need personalised advice? [Find more information here](/contact).
A professional appraisal minimises financial risks and enables informed decisions when buying or selling a property. It provides a realistic assessment of the market value.
The choice of the right valuation method (comparative value, income value, or asset value method) is crucial for the accuracy of the appraisal. A full appraisal provides legal certainty.
Current market trends such as sustainability and digitalisation are influencing property values. Investing in a valuation report can prevent financial disadvantages of up to 20%.
What is a Valuation Report and When is it Necessary?
A property valuation report is a detailed analysis of a property's market value, created by a qualified expert. It serves as a basis for decision-making in buying and selling, financing, tax purposes, and legal disputes. A professional property valuation report protects against financial risks by providing an objective assessment of the actual value. It is particularly important when there are complex issues or legal disputes where a well-founded valuation is essential. The preparation of such a report requires expertise and experience to correctly consider all value-relevant factors.
Definition and Purpose
A property valuation report is a comprehensive evaluation that determines the current market value of a property. It is carried out by an independent expert who is certified and possesses the necessary expertise. The main purpose of such a report is to provide an objective and understandable basis for financial decisions. This can be the case in purchase or sale negotiations, when applying for financing, or in the settlement of inheritance matters. A property valuation report also serves to document the value of a property to tax authorities or in court.
Distinction from Other Evaluations
It is important to differentiate between different types of valuations. A short valuation is a simplified version of the property valuation report and is suitable for less complex cases, such as selling a property without legal disputes. A full report, on the other hand, is more detailed and required for court proceedings or tax purposes. The market value reflects the actual market value, while the standard land value is an average value that can vary regionally. According to Certa Gutachten, the standard land value can significantly differ from the actual market value, highlighting the importance of an individual property valuation report.
The Importance of a Valuation Report
A property valuation report is crucial for minimizing financial risks and making informed decisions. It provides a realistic assessment of the market value, which is beneficial for both buyers and sellers. Furthermore, it offers legal protection in disputes and serves as a basis for financing. The World emphasizes the importance of a property valuation report for transparency and security in real estate transactions.
Financing and Sale
A realistic market value, determined by a professional property valuation report, greatly facilitates financing and accelerates the sales process. Banks and financial institutions require a sound valuation to assess the risk of property financing. A property valuation report provides this security and builds trust. It also helps to avoid financial disadvantages by providing a solid basis for price negotiations. Sellers can objectively prove the value of their property, while buyers can ensure they are paying a fair price. Our information on determining your property's value provides further insights.
Legal Assurance
A full report, carried out by a publicly appointed and sworn expert, is recognized in court and offers legal certainty in disputes. This is particularly important in divorces, inheritance disputes, or other legal conflicts where the value of a property plays a crucial role. The property valuation report serves as evidence and helps to find a fair and just solution. It documents the condition of the property, the location, and other value-influencing factors to ensure an objective evaluation.
Full Valuation (Market Value Report)
The Full Valuation, also known as a Market Value Report, is the most comprehensive form of property appraisal. It is prepared by publicly appointed and sworn experts and meets the highest quality standards. Such a report is admissible in court and recognised by all authorities. It serves as a foundation for important decisions and provides legal certainty in complex situations. The experts advise that a Full Valuation is indispensable for legal disputes.
Features and Requirements
A Full Valuation is characterised by a comprehensive analysis of all value-relevant factors. The expert takes into account the location, condition, building structure, equipment, and other value-influencing features of the property. Legal aspects such as easements and rights of way are also examined. The report must be comprehensible and transparent so that all parties can understand the valuation. Preparing a Full Valuation requires high expertise and many years of experience from the expert.
Applications
The applications for a Full Valuation are diverse. It is often required in divorces, inheritance disputes, and tax matters (inheritance and gift tax). Also, in the case of foreclosure sales and insurance matters, a Full Valuation is essential. It serves as a basis for calculating compensation payments or determining the market value in the context of an auction. A Full Valuation offers a reliable basis for all parties involved and helps to avoid or resolve disputes.
Short Assessment (Brief Report)
The Short Assessment is a more cost-effective alternative to the Full Valuation. It is less detailed and not admissible in court, but still provides a good guide to the market value of a property. A Short Assessment is suitable for straightforward cases where no legal disputes are expected. It is important to note that a Short Assessment does not offer the same level of security and reliability as a Full Valuation.
Features and Limitations
A Short Assessment is more cost-effective than a Full Valuation because it is less detailed and takes less time to prepare. It is based on a simplified analysis of value-relevant factors and does not consider all aspects in detail. Moreover, a Short Assessment is not admissible in court and is generally not recognised by authorities. It only serves as a guideline for the market value of a property. Our information on property valuation factors can help you better understand the basics.
Applications
The Short Assessment is primarily suitable as a guide for buying or selling a property. It can also be helpful in reaching agreements in inheritances or divorces without disputes. However, if legal disputes are expected, a Full Valuation is indispensable. A Short Assessment does not provide sufficient security and cannot be used as evidence in a legal dispute.
Online Assessments
Online assessments are a quick and easy way to get an initial estimate of a property's market value. They are based on automated algorithms and do not take into account all the individual characteristics of the property. Therefore, online assessments should be approached with caution and not used as the sole basis for decision-making.
Advantages and Disadvantages
Online assessments are fast and easy but inaccurate. They do not consider the individual characteristics of the property, such as the condition, equipment, or detailed location. Moreover, they are based on average values and can significantly miss the actual market value. The advantage of online assessments is that they are free or low-cost and quickly available.
Suitability
Online assessments are only suitable for a rough initial estimate. They can serve as a first reference point to get an idea of a property's market value. However, for a well-founded decision, a professional Property Valuation is essential. An online assessment cannot replace the expertise and experience of an expert.
Comparative Value Method
The Comparative Value Method is one of the most common approaches to determining the market value of a property. It is based on comparing similar properties that have recently been sold in the same location. The more similar the comparative properties are, the more accurate the result. The comparative value method is particularly well suited for undeveloped plots and flats where sufficient comparative data is available. The Certa Appraisal describes the method as particularly suitable for flats.
Principles and Application
The Comparative Value Method is based on the principle that similar properties in similar locations also have similar values. The expert gathers data on comparable properties that have been sold in the recent past and analyses their characteristics. Subsequently, the sale prices of the comparative properties are adjusted to the specific characteristics of the property being evaluated. Differences in size, fittings, condition, and location, for example, are taken into account. Our information on land standard values for new builds can help you better understand the fundamentals.
Strengths and Weaknesses
The Comparative Value Method is characterised by high accuracy when sufficient comparative data is available. It is particularly well suited for standardised properties, such as flats or terraced houses. However, difficulties arise with individual or rare properties where there are few or no comparable properties. In such cases, other valuation methods must be employed.
Income Approach
The Income Approach is a method for determining the market value of rented residential and commercial properties. It is based on the calculation of the income value, which is derived from the rental income and operating costs. The income approach considers the long-term profitability of the property and is particularly relevant for investors.
Principles and Application
The Income Approach is based on the assumption that the value of a property depends on the future earnings it generates. The expert calculates the income value by determining the annual rental income minus the operating costs (e.g., maintenance, management) and multiplying it by a capitalisation rate. The capitalisation rate takes into account the risk of the investment and the expected return. Wikipedia explains that this method is particularly suitable for multi-family houses.
Components
The key components of the Income Approach are the land value, the building income value, and the monthly income. The land value is usually determined using the comparative value method. The building income value is derived from the rental income minus the operating costs. The monthly income forms the basis for the calculation of the annual income. All three components are combined to determine the total income value of the property.
Cost Approach
The Cost Approach is a method for determining the market value of owner-occupied properties and those for which no comparative data is available. It is based on the separate valuation of land and building. The depreciated replacement cost of the building is determined based on construction costs and depreciation. The cost approach is often used by banks and for historical buildings.
Principles and Application
The Cost Approach is based on the assumption that the value of a property corresponds to the costs incurred to construct an equivalent object. The expert assesses the land and the building separately. The value of the land is usually determined using the comparative value method. The value of the building is determined based on construction costs (e.g., materials, labour costs) and depreciation (e.g., age, condition). The Dgusv emphasises the importance of considering market trends.
Application
The Cost Approach is frequently used by banks to determine the lendable value of a property. It serves as a basis for loan provision and offers a certain level of security for the bank. Additionally, the cost approach is commonly used for historical buildings for which there are no comparable objects and where income value is irrelevant. The method provides a way to establish the value of these unique properties.
Location and Infrastructure
The location and infrastructure of a property are crucial factors that significantly impact its value. A good location is characterised by excellent connections to public transport, shopping facilities, schools, and other important amenities. The surrounding area also plays a vital role. A quiet residential area with plenty of green spaces is generally more valuable than a noisy and busy street. The Certa Assessments emphasise the importance of location for market value.
Micro and Macro Location
It is important to differentiate between micro and macro locations. The macro location refers to the region or city where the property is situated. The micro location relates to the immediate surroundings of the property. Both factors influence the value. A property in a high-growth region with good infrastructure is usually more valuable than one in a structurally weak area. The immediate environment also plays a key role. An unobstructed distant view or unique design features can significantly increase a property's value.
Building Fabric and Condition
The building fabric and condition of a property are other important factors influencing its value. A well-maintained property with solid building fabric is generally more valuable than one requiring renovation and with structural defects. The age of the property also matters. A new property is typically more valuable than an older one, as it requires less maintenance.
Construction Year and Modernisations
The construction year of a property provides insights into its condition and equipment. However, an older property can be upgraded through modernisations. The installation of modern windows, a new heating system, or contemporary sanitary fittings can significantly increase a property's value. It is essential to consider both the construction year and the modernisations carried out when evaluating a property. Our information on land costs provides further insights.
Equipment and Energy Efficiency
The equipment and energy efficiency of a property are increasingly important factors influencing its value. High-quality equipment with modern materials and up-to-date technology can enhance a property's value. Energy efficiency also plays an increasingly crucial role. An energy-efficient property with good insulation and a modern heating system is generally more valuable than an energy-inefficient one.
High-Quality Equipment
High-quality equipment with modern materials and up-to-date technology can enhance a property's value. This includes, for example, parquet floors, high-quality tiles, modern fitted kitchens, and comfortable sanitary facilities. Smart home systems and other technical innovations can also increase a property's value. It is important to consider the quality of the equipment when evaluating a property.
Energy Certificate
The energy certificate provides information about a property's energy efficiency. It shows the amount of energy the property consumes and what measures can be taken to improve energy efficiency. A property with a good energy certificate is generally more valuable than one with a poor energy certificate, as it incurs lower energy costs and contributes to climate protection. Wikipedia emphasises the importance of energy efficiency.
Legal Aspects
Legal aspects can also affect a property's value. These include, for example, building constraints, rights of way, and other encumbrances. A property with building constraints or rights of way is generally less valuable than one without such encumbrances. It is important to consider legal aspects when evaluating a property.
Building Constraints and Rights of Way
Building constraints are restrictions that burden a property and can limit its use. Rights of way are third-party rights to access the property. Both encumbrances can reduce a property's value. It is important to examine building constraints and rights of way and assess their impact on value when evaluating a property.
Document Collection
The first step in producing a Property Valuation Report is to collect all necessary documents. These serve as the foundation for the expert's analysis and assessment. The more complete the documents, the more accurate and reliable the report will be. It is therefore advisable to carefully compile all relevant documents and provide them to the expert. The expert advisors highlight the importance of complete documentation.
Necessary Documents
The necessary documents for a Property Valuation Report include, among others, the land register extract, the cadastral map, the public easement register, the building plans, the energy performance certificate, the floor plan, the living space calculation, and tenancy agreements (for rented properties). The land register extract provides information about ownership and any encumbrances on the property. The cadastral map shows the location and dimensions of the property. The public easement register contains information about any easements affecting the property. The building plans depict the architectural design of the building. The energy performance certificate provides information about the building's energy efficiency. The floor plan shows the layout of the rooms. The living space calculation provides information about the size of the living area. The tenancy agreements (for rented properties) provide details about rental income.
Inspection and Analysis
Following the document collection, the expert conducts an inspection of the property. During this visit, they assess the condition of the building, the location of the property, and other value-influencing factors. Subsequently, they analyse the collected documents and the market to make a well-founded valuation.
On-Site Visit
The on-site visit is a crucial component of producing a Property Valuation Report. The expert inspects the property and forms an impression of its condition, features, and location. They pay attention to construction defects, damage, and other value-influencing factors. Furthermore, they engage in discussions with the owner or manager to gather additional information. The on-site visit serves to comprehensively assess the property and collect all relevant information.
Analysis of Documents and Market
After the on-site visit, the expert analyses the collected documents and the market. They evaluate the information and consider current market trends, demand, and supply. Additionally, they compare the property with similar properties in the area to make a realistic valuation. The analysis of documents and the market is a crucial step in creating a well-founded Property Valuation Report.
Drafting the Report
Following the inspection and analysis, the expert drafts the report. This document contains a detailed description of the property, a justification of the valuation, and the determined market value. The report must be comprehensible and transparent so that all parties can understand the valuation.
Detailed Description and Justification
The Property Valuation Report includes a detailed description of the property, including its location, size, condition, and features. Furthermore, all value-influencing factors are thoroughly explained. The valuation is justified in a comprehensible manner, and the valuation methods used are explained. The report must be transparent and understandable, so that all parties can follow the valuation.
Delivery Time
The delivery time for a Property Valuation Report is generally around 10 working days after submission of all documents. However, this may vary depending on the scope and complexity of the report. It is advisable to arrange for a report to be prepared early to allow sufficient time for processing.
Cost Factors
The costs for a property valuation report are negotiable and depend on various factors. These include the property's market value, its location, type, and condition. The scope of the valuation and the expertise of the surveyor are also important. It is advisable to get information about the costs in advance and gather different offers. The Certa Appraisals provides an overview of the cost factors.
Market Value, Location, Type and Condition of the Property
The higher the property's market value, the higher the costs for the property valuation report typically are. The location, type, and condition of the property also affect the costs. A property in a sought-after location, a special property, or one that requires renovation usually demands more effort for the assessment, thereby incurring higher costs.
Price Ranges
The price ranges for a property valuation report can vary depending on the type of report and the qualification of the surveyor. A full valuation is generally more expensive than a brief evaluation. The costs for a publicly appointed and sworn expert are usually higher than those for an independent property surveyor.
Full Valuation
The costs for a full valuation typically range between 0.5% and 1% of the property's market value. This generally amounts to between 1,000 and 2,500 EUR. However, exact costs depend on the factors mentioned above. It is advisable to obtain a quote in advance and negotiate the costs with the surveyor.
Brief Evaluations
The costs for a brief evaluation are significantly lower than those for a full valuation. They generally start at around 100 EUR. However, it is important to note that a brief evaluation does not have legal validity and is not suitable for all purposes. It only serves as a guide to the property's market value.
Who Bears the Costs?
The question of who bears the costs for a property valuation report is a matter of negotiation. Generally, the costs are borne by the client commissioning the report. This can be the buyer, the seller, or another party. It is wise to clarify the cost issue in advance and make an agreement.
Buyer or Seller?
In practice, it is common for the buyer to bear the costs of the property valuation report, as they usually have an interest in knowing the market value of the property. However, it can also be agreed that the seller bears the costs, especially if they need a report to justify the sale price. The cost issue should be addressed in the purchase contract or a separate agreement.
Qualification and Certification
The qualification and certification of the expert are key factors for the quality and reliability of a property valuation report. A qualified expert possesses the necessary expertise, experience, and independence to provide an objective and well-founded assessment. It is advisable to obtain information about the expert's qualifications and certification in advance and to seek references. The Wikipedia provides an overview of the qualifications.
Publicly Appointed and Sworn Experts
Publicly appointed and sworn experts are particularly qualified and experienced. They have been examined and appointed by a government body and are obliged to prepare their reports impartially and independently. A report from a publicly appointed and sworn expert holds high credibility and is recognised by courts and authorities. It is required for legally binding reports.
Independent Property Surveyors
Independent property surveyors are not government-examined and appointed but still possess appropriate training and experience. They are generally more affordable than publicly appointed and sworn experts, but their reports do not carry the same credibility. They are suitable for simple market value assessments.
State-Recognised Experts
State-recognised experts are authorised by a government body and may undertake specific tasks in the field of property valuation. They often work for authorities and prepare reports in the public interest. Their reports have high credibility and are recognised by courts and authorities.
Choosing the Right Expert
Selecting the right expert is crucial for the quality and reliability of a property valuation report. It is advisable to gather information in advance about the expert's qualifications, experience, independence, and reputation. References and reviews can also aid in the selection process.
Criteria
Various criteria should be considered when selecting the right expert. These include the expert's experience, expertise, independence, and reputation. Additionally, the cost and delivery time of the report also play a role. It is advisable to obtain several offers in advance and compare the services and costs. Our information on the factors of property valuation can help you better understand the basics.
Influencing Factors
Current market trends and future developments have a significant impact on property prices and demand. These include factors such as interest rates, inflation, and demographic changes. Political decisions and economic developments can also affect property prices. It is important to consider these influencing factors when evaluating a property. The Dgusv emphasises the importance of considering market trends.
Interest Rates, Inflation, and Demographic Changes
Interest rates, inflation, and demographic changes are key factors influencing property prices and demand. Rising interest rates can dampen demand for properties because they increase financing costs. High inflation can drive up property prices as it reduces the value of money. Demographic changes, particularly the aging population, can alter the demand for certain types of properties.
Sustainability and Digitalisation
Sustainability and digitalisation are increasingly important topics in property valuation. The energy efficiency of a property, the use of sustainable building materials, and the integration of digital technologies can enhance a property's value. It is important to consider these aspects when evaluating a property.
ESG Criteria
ESG criteria (Environmental, Social, Governance) are increasingly vital for investors and buyers. They consider the environmental, social, and corporate aspects of a property. A property that meets ESG criteria is generally more valuable than one that does not. ESG criteria include aspects such as energy efficiency, the use of sustainable building materials, accessibility, and the owner's social responsibility.
Hybrid Working Models
Hybrid working models, where employees work partly in the office and partly from home, impact the valuation of commercial properties. Office spaces suitable for hybrid working models are generally more valuable than those that are not. This is because hybrid working models provide flexibility and efficiency and can enhance employee satisfaction.
Dynamic Valuation Models
Dynamic valuation models can adapt to market changes and incorporate current market trends. They integrate big data, AI, and machine learning to enable more precise and up-to-date valuations. Dynamic valuation models are particularly important in a rapidly changing market environment.
Adapting to Market Changes
Dynamic valuation models continuously adapt to market changes and consider current market trends. They integrate big data, AI, and machine learning to provide more precise and up-to-date valuations. Dynamic valuation models are especially important in a fast-changing market environment, where traditional valuation methods can quickly become outdated.
A professional property valuation report is essential to minimise financial risks and make informed decisions. It provides a realistic assessment of market value, which is beneficial for both buyers and sellers. Additionally, it serves as legal protection in disputes and as a foundation for financing. Investing in a property valuation report generally pays off, as it guards against costly mistakes.
With a variety of valuation methods and factors influencing value, it is important to engage a qualified expert who possesses the necessary expertise and experience. A professional property valuation report gives you the assurance that you are making an informed decision and achieving the best possible price.
Now is the perfect time to have a professional property valuation report prepared. Contact us today to start your personalised consultation and ascertain the value of your property. Register for free and receive an immediate initial assessment of your property's value.
Bundesfinanzministerium provides information on the current property tax reform in Germany.
Destatis offers price indices for residential properties and building land.
Destatis provides a quality report on purchase values for building land from 2021 onwards.
What is the difference between a short appraisal and a full appraisal?
A short appraisal is a more cost-effective, simplified assessment suitable for straightforward sales cases. A full appraisal is more detailed, admissible in court, and necessary for legal disputes like divorces or inheritance disputes.
When do I need a valuation report for my property?
A valuation report is essential for buying or selling, submission to the tax office, during inheritance disputes, divorces, and to determine the market value.
What factors affect the value of my property?
The most important factors are the location (micro and macro location), building fabric, condition, facilities, energy efficiency and legal aspects such as encumbrances or easements.
What valuation methods are there and when are they used?
There is the comparison method (for undeveloped land and condominiums), the income approach (for rented properties) and the cost approach (for owner-occupied properties and those without comparable data).
How long does it take to prepare a valuation report?
The preparation of a valuation report usually takes about 10 business days once all necessary documents have been provided.
What does a valuation report for my property cost?
The costs are freely negotiable and depend on the market value, the location, the type and condition of the property. A full appraisal typically costs between 0.5% and 1% of the market value.
Who bears the costs for the valuation report?
Generally, the client commissioning the appraisal bears the costs. This can be the buyer, the seller, or another party. It is advisable to clarify the cost issue in advance.
What role does sustainability play in property valuation?
Sustainability and energy efficiency are increasingly important. A property with a good energy performance certificate and consideration of ESG criteria is typically more valuable.
