Do you need to have the value of your property precisely determined but don't know how appraisals are created? This process may seem complex, but with the right knowledge and partner by your side, it is straightforward. Learn how to obtain a reliable valuation report in just four steps.
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The topic briefly and concisely
The creation of a real estate appraisal follows a structured, typically 4-step process: order clarification, property inspection, valuation, and report preparation.
In Germany, three standardised methods (comparative value, income, and asset value methods) are used for property valuation according to ImmoWertV.
The selection of a qualified and independent expert is crucial for the reliability and acceptance of the assessment.
The exact value of a property is crucial in many situations – whether for sale, inheritance, or tax purposes. A professionally prepared appraisal provides you with a sound and comprehensible valuation. But how are such appraisals actually created? This article guides you through the four essential phases of appraisal creation: from the initial assignment clarification, through the indispensable property inspection, and the methodical value determination, to the final preparation of the appraisal. This way, you gain clarity and confidence for your property-related decisions.
Phase 1: Thorough clarification of the order and comprehensive data collection
Before a property appraiser begins the actual valuation, detailed clarification of the assignment is central. In this initial phase, the exact requirements and the purpose of the appraisal are precisely defined. For a sound valuation, the expert requires a variety of documents and information. These typically include a current land registry extract, building plans, details of land and living areas, as well as information on modernisations carried out in the past 15 years.
The appraiser obtains this data through inquiries at relevant offices, authorities, and local appraisal committees. The completeness of these documents is crucial for the accuracy of the appraisal and speeds up the entire process. Often, appraisers can acquire missing documents for an additional fee, which can reduce the effort for you as the owner by up to 80%. A clear definition of the objective, for instance, whether the appraisal is needed for a sale, an inheritance matter, or to be presented in court, is essential. This first step lays the foundation for a precise and reliable appraisal.
Phase 2: The essential on-site property viewing
A fundamental component of creating a valuation report is the thorough inspection of the property. During this site visit, the surveyor assesses the actual condition of the property, including the building fabric and technical equipment. The duration of such an inspection can vary between one and several hours, depending on the size and type of the property.
During the exterior inspection, the facade, roof, plot, and immediate surroundings as well as infrastructure are assessed. The interior inspection focuses on the building fabric, features such as heating systems and windows, the state of renovation, and the layout of rooms. The surveyor carefully documents all relevant details with photos and notes. This detailed assessment is crucial to realistically evaluate the condition of the property. Only after this examination can a well-founded valuation report be produced. Minor defects, which might account for about 5% of the total value, can be identified and evaluated here.
Phase 3: Application of Recognized Valuation Methods
The actual valuation is carried out based on the collected documents and the findings from the property inspection. In Germany, three standardised procedures are established for this in the Immobilienwertermittlungsverordnung (ImmoWertV). The choice of procedure depends on the type of property and the purpose of the valuation.
The following methods are applied:
Comparative Value Method: This method is mainly used for single-family homes and condominiums. The value is determined based on the selling prices of at least 3-5 comparable properties.
Income Value Method: This method is used for rented properties or commercial objects. The value is derived from the sustainable achievable rental income and management costs.
Value in Use Method: For owner-occupied properties or special objects for which there are no comparable values, the value in use method is used. The value is based on the construction costs of the building and the land value.
A qualified appraiser not only selects the appropriate method but often also combines several methods to achieve as precise a result as possible. The correct application of these methods is crucial for the accuracy of the report. The results of these procedures are then incorporated into the final report.
Phase 4: Creation and Delivery of the Written Report
In the final step, the expert compiles all collected data, the results of the inspection, and the valuation methods used into a written report. This document presents all relevant facts in detail and credibly justifies the determined market value. A professional market value report can range in length from 30 to over 100 pages, depending on the complexity and type of assignment.
The report typically contains the following elements:
A detailed description of the property being evaluated (location, land, building).
Documentation of rights and encumbrances (e.g., rights of way).
A market description and the justification for the chosen method.
The comprehensible derivation of the land value and the value of the buildings.
The determination of the market value taking into account the specific characteristics of the property.
A photographic documentation and relevant attachments such as plans.
The preparation of a detailed report typically takes three to four weeks after the site visit and receipt of all documents. Some assessors also offer faster processing times. Upon completion and internal review, the report is delivered to the client in the desired number of copies. With such a well-founded valuation report, you are well-equipped for negotiations or legal disputes. For a preliminary assessment or when time is of the essence, the Auctoa ImmoGPT-Chat can be a valuable aid in obtaining an initial valuation within under 5 minutes.
Choosing the Right Surveyor: What You Should Consider
The quality of a property appraisal largely depends on the expertise of the commissioned expert. In Germany, the title "property appraiser" is not legally protected. Therefore, it is all the more important to focus on recognised qualifications. Publicly appointed and sworn experts as well as certified appraisers (e.g., according to DIN EN ISO/IEC 17024) must prove their special expertise and personal suitability. Their appraisals are generally valid in court and with authorities.
When selecting an appraiser, ensure they have at least 5 years of professional experience in property valuation. Ask for references and check whether the appraiser is a member of a recognised professional association. An independent appraiser will always evaluate neutrally and objectively. Clarify costs in advance, which typically range from several hundred euros to up to 1.5 percent of the property's value. A transparent cost estimate should be a matter of course. Investing in a qualified appraiser provides you with a reliable basis for valuation. This is the next step towards making an informed decision.
Conclusion: A structured approach leads to reliable reports
Creating a property appraisal is a multi-step process that ranges from thorough clarification of the assignment to detailed written elaboration. Each of the four main steps – data collection, property inspection, application of standardized valuation methods, and preparation of the report – requires precision and expertise. A qualified surveyor ensures that all value-relevant factors are considered, resulting in a realistic and market-conform market value. This process typically takes 3-4 weeks.
A professionally prepared report provides you with the necessary security and transparency for important real estate-related decisions. If you need a quick, AI-supported yet well-founded evaluation, an Auctoa assessment or a conversation with our ImmoGPT chat can offer valuable initial guidance and accelerate the process. Rely on data-driven analyses for your property decisions!
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Additional useful links
The Statistische Bundesamt offers comprehensive information on construction price indices and the property price index.
The Statistische Bundesamt provides detailed tables on house prices and building land.
BORIS-D is the central hub for land value information in Germany.
The Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR) offers a dashboard with up-to-date data on the property market report.
The Deutsche Bundesbank provides an indicator system for the residential property market.
The Bundesfinanzministerium provides information on inheritance and gift tax.
The ImmoWertV 2022 contains the German regulation for property valuation.
Geoportal.de is the central access point for geodata in Germany.
FAQ
What is the difference between a short appraisal and a market value appraisal?
A brief appraisal is a shortened form of valuation (about 1-2 pages) and often serves as an initial orientation. A market value appraisal (long appraisal, often 30-40+ pages) is a detailed, legally sound assessment that also holds up in court.
When do I need an appraisal of market value?
A market value appraisal is often required in cases of inheritance disputes, divorces, gifts, for tax purposes, or in legal disputes to demonstrate a legally sound property value.
Can I also have an expert report prepared for a single apartment?
Yes, valuations can be carried out for all types of properties, including condominiums. The comparative method is often used in this context.
How do I find a qualified real estate appraiser?
Pay attention to certifications (e.g., according to DIN EN ISO/IEC 17024), public appointments and oaths, or memberships in renowned professional associations. Ask about work experience (at least 5 years) and references.
What role does the deadline play in the preparation of the report?
The valuation date is the date to which the assessment refers. This can be the current day or a date in the past, which is relevant, for example, in inheritance tax cases.
What happens if documents are missing for the report?
Missing documents can delay the process. Many appraisers offer to procure the necessary documents from offices and authorities for an additional fee.
