Discover the worth of your property land! Evaluate its value now.
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When it comes to buying, selling, or inheriting a property, understanding its value is crucial. Here's a breakdown of the key factors and methods involved in property valuation.
Different Types of Properties and Their Valuations
Properties vary in value due to their type and stage of development. Developed properties are typically more valuable than undeveloped ones, with development costs ranging between 40 and 70 €/sqm. Different types of properties include development land, raw building land, building land, built property, vacant land, and agricultural land.
Value-Affecting Factors
The value of a property is influenced by several factors, such as location, size, zoning, level of infrastructure, and soil quality. For instance, properties in high-demand areas like Düsseldorf, Berlin, or Hamburg have higher values, while legacy pollutants can reduce property value, especially for areas previously used for commercial or industrial purposes.
Online Valuation Tools and the Comparative Method
Online valuation tools are available to determine the value of a property. These tools request information about property size, infrastructure, buildability, zoning, planned sale date, and location (exact address). The comparative method examines the purchase prices of comparable properties to arrive at an estimate.
Alternative Property Valuation Methods
Besides online valuation tools and the comparative market analysis method, key alternative property valuation methods include:
- Professional Appraisal: A licensed appraiser conducts a detailed, independent evaluation of the property's value considering factors like condition, size, location, recent sales, and improvements.
- Income Approach: Commonly used for commercial properties or rental real estate, this approach estimates value based on the property's potential income, factoring in rental income, operating expenses, and capitalization rates to assess profitability and thus market value.
- Broker Price Opinion (BPO): Conducted by real estate brokers or agents, a BPO provides a market value estimate typically for mortgage servicing or distressed properties.
- Desktop and Hybrid Appraisals: These are appraisal alternatives combining remote data review (desktop) with limited physical inspection or electronic data (hybrid).
Professional appraisal remains the standard for depth and accuracy, while income approaches suit investment properties. Broker Price Opinions and hybrid methods offer faster, lower-cost alternatives but usually with less detail than full appraisals.
Base Value of Land and Traffic Value Appraisal
The base value of land refers to the official collection of purchase prices maintained by independent committees for real estate. In legal disputes, a "traffic value appraisal" from a certified appraiser may be necessary for properties owned jointly by divorcing spouses.
Importance of Property Valuation
The value of a property is important in cases of selling, divorce, inheritance, and legal disputes. When taking out a mortgage, the loan-to-value ratio is crucial for the bank and affects loan terms. If you inherit a property, it's important to know its value for potential tax savings. In an inheritance community, a property valuation can be helpful for selling or resolving disputes.
Additional Considerations
Property size and shape play a role in attractiveness to potential buyers, with square properties generally more attractive than long, narrow ones. A right of way must be granted by the owner of another property if access is needed to reach a property. Vacant land often has poor soil quality and requires a discount on the selling price for remediation.
In some cases, a tenant may have a right of first refusal when the owner decides to sell a rented property. The land registry contains information about who owns which property and is located at the land registry office, which belongs to the local court. A soil report can provide clarity on soil condition.
When selling a property, it may be necessary to apply a discount to the price for development land. Inheriting a property with legacy pollutants can reduce its value. If you're planning to sell or divide a larger property, consider dividing it and selling separately to increase the selling price.
In conclusion, understanding property valuation is essential for making informed decisions when buying, selling, or inheriting a property. By considering various factors and using appropriate valuation methods, you can ensure a fair and accurate assessment of a property's value.
- When deliberating the potential investment in real-estate, one should be aware that the online valuation tools can help estimate a property's worth by requesting information about its size, infrastructure, buildability, zoning, planned sale date, and location.
- In the realm of finance and real-estate, understanding the value-affecting factors such as location, size, zoning, level of infrastructure, and soil quality is critical when Investing, buying, selling or inheriting a property.
