HOW MUCH IS YOUR PROPERTY WORTH?

WHAT PROCEDURES ARE THERE?

There are three possible valuation methods for calculating the value of a property: the comparative value method, the intrinsic value method, and the income value method. The method applied in the valuation depends on the property to be evaluated. However, it is also possible to use several valuation methods simultaneously. According to the Property Valuation Act, this may be necessary to take into account all circumstances that determine the value of the property.

THE COMPARATIVE APPROACH

In a comparative method, the value of the property is determined by comparing the purchase prices of similar properties. An average price is calculated from the pool of comparable objects. The rule is: the more comparable prices are included in this calculation, the more accurate the estimate is. The age of the property, energy consumption, or features are factored into the result through adjustments for additions and deductions. This method is applied, for example, to used apartments, building plots, or terraced houses.

THE REAL VALUATION PROCEDURE

In this process, the land and construction value as well as the values of other components of the property are determined. This may also include the accessories or fittings of the property. Here too, age-related wear and tear, location, construction costs, etc., are taken into account in the calculation. The direct value procedure is used, for example, in new construction projects or single-family and two-family homes.

THE INCOME APPROACH

In the income capitalization method, the value of the property is determined by capitalizing the net income generated by this object. This method is primarily used for rental properties, such as multi-family homes or commercially used buildings and office properties, as well as investment properties. Investors are interested not only in location, fittings, etc., but especially in how much they can earn with this property.

CRITERIA FOR VALUE DETERMINATION

In addition to these three methods, there are also other criteria that must be included in the valuation of a property. In order to determine the actual value as accurately as possible, both the characteristics of the property, such as location, year of construction, usable and living space, features, and condition, as well as the energy performance certificate, and legal factors, such as special usage rights and the amount of repair reserves, must be taken into account. These criteria carry varying weights relative to each other. For example, a house with a larger living area may be cheaper than a small house – and that is solely due to the location.

Fundamentally, the interplay of all these relevant criteria is crucial for property valuation. A professional and experienced property appraiser takes all these factors into account to ultimately determine the value as accurately and precisely as possible. This is because a correctly determined property value not only accelerates the transaction process but also achieves the best possible price for the seller.

AKKADIA EVALUATES YOUR PROPERTY

We at AKKADIA are happy to assist you and provide you with detailed advice on all topics related to the sale of real estate and its valuation.