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. Which of these methods is applied in the valuation depends on the property to be valued. However, it is also possible to apply several valuation methods at the same time. According to the Property Valuation Act, this may be necessary to take into account all circumstances that determine the value of the property.

THE COMPARABLE VALUE METHOD

In a comparative procedure, 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 properties. The rule is: the more comparison prices are included in this calculation, the more accurate the estimate is. The age of the property, energy consumption, or amenities are factored into the result through adjustments. This method is used, for example, for used apartments, building plots, or terraced houses.

THE 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 object. Again, age-related wear and tear, location, construction costs, etc., are taken into account in the calculation. The cost approach is applied, for example, in new construction projects or single-family and two-family homes.

THE INCOME APPROACH

The income value method determines the value of the property by capitalizing the net returns generated by the property. This method is primarily used for rental properties, such as multi-family houses, commercially used buildings, and office properties, as well as investment properties. Capital investors are interested not only in location, amenities, etc., but especially in how much they can earn from this property.

CRITERIA FOR DETERMINING VALUE

In addition to these three methods, there are also other criteria that must be considered 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, amenities and condition, as well as the energy certificate, and legal factors, such as special usage rights and the amount of the repair reserve, must be taken into account. These criteria have varying degrees of importance in relation to one another. For example, a house with a larger living space can be cheaper than a small house – and this can be solely due to the location.

In principle, 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 sale 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.