Your Guide to Property Valuation in Germany

Do you plan to buy or sell real estate and need a property valuation in Germany? An accurate value appraisal ensures you get a fair price for the property you want to buy or sell. It is important that you understand how property valuation in Germany works to get the best deal.

If you plan on buying a house using a German bank loan, the bank will perform their own property valuation and write the value in the mortgage offer. However, it is important that they appraise the property independently. With a positive value check, you can get the mortgage offer and validate it before signing the purchase and sale agreement.

If you are the seller of a property, a qualitative property valuation in Germany ensures you get your home’s worth when you sell it. It will allow you to get the right property market price and prepare for an effective property selling process in Germany.

Period apartment buildings in Germany benefit from high real estate valuation
Multi-property view in Berlin Mitte, Germany

Which factors are important for a property valuation in Germany?

There are many factors that determine the value of a property in Germany. Valuers look at the case of each property independently. Some value factors are related to the general market and reflect the offer and demand for properties both in the city and the surrounding of the property.

We can split the main valuation drivers in Germany into 5 categories:

General market conditions

When buying a property, mortgage rates and real estate market trends matters a lot not only for the buyers but also for the landlords. There is no exception for real estate valuation in Germany. Indeed, low interest rates and strong demand for real estate will benefit indirectly to the seller because he can get to get the highest sale price.

At the opposite side, if interest rates soar like recently, since the war started in Ukraine, buyers in Germany have higher monthly instalments on their mortgages so that they can afford less purchase power and budgets.

The increase of residential German mortgage rates in results into shrinking the affordability of properties and hence number of candidates for a property purchase. If the mortgage rates continue to increase, this will have a negative impact on selling prices and real estate valuation in Germany.

Property location

Demand for the area, facilities and transports, general prices of the area, demand for the micro-locations and immediate surrounding is nice and sought-after…Location of your house will have quite an important impact on your property valuation in Germany. Location can fall into micro or macro layers. Micro layers point to the nearby environment and amenities, such as shops, doctor clinics, cafes, and other businesses near the house. The macro environment is the wider surrounding, such as the district.

Valuers might also consider the projected growth of the location, including addition of roads and new traffic connections. However, addition of a busy road just in front of your premises will diminish its value. Further, value assessors consider the value of other properties in the area based on recently property sales in the immediate neighborhoods. 

Lastly, the city also determines the value of the house. The rules and regulations of the property market in Berlin are different from the ones in other cities such as Stuttgart, Munich, and Hamburg

House & building condition

These factors are related to the community in which the apartment is located and can have a material impact on your property valuation in Germany. They include the condition of the house (façade, staircase, roof…), the construction year of the building and its construction style & materials. The building heating system and energy efficiency and the number of apartments in the property are considered. In general, newly built properties benefit from best real estate valuation in Germany, as the owner has no significant community works for some decades. Authentic period buildings (Altbau in German) and other types of properties (i.e., sixties or thirties) has to be well-maintained to benefit from good real estate valuation in Germany.

Apartment interior

The main factors for property valuation are: the living size of the apartment, the number of rooms, the optimization of the floor plan, the exterior spaces (i.e., balcony, garden, terrace), the ceiling height, the flooring…In this view, the need for interior renovation or improvement, the energy efficiency, the age of the equipment amenities, and systems in the flat (i.e. Water boiler) are important information to consider for valuing a property in Germany.

As a property seller in Germany, you may also request for a property valuation after renovations or after adding modern features to your house so that you enhance the value of the property in Germany.

Rent income

For an investment what matters the most is the profitability. In this case the rent and the return would be determining for the property valuation in Germany. Return on investment includes all the above-mentioned factors plus the calculation of the net proceed after deducting all costs (i.e., management, taxes…) and considering future renovations. Hence, one should put the numbers together to see clearer to which extent would the property be profitable for a potential investor. For instance, in rented property, the valuer considers vacancy rate and rent per square meter are most determining factors in determining the cost of a home.

Optimized floor plan increase the value of a property in Berlin
An optimized floor plan gives more value to the property
an optimal presentation is key to get high property valuations in Germany
First impression in key to property value optimization and best price selling in Germany

Personal or Professional Valuation in Germany?

When appraising a house, you have two options. You can do it yourself, or you can hire experts to do it for you.

Owner valuation can be a great way to save money on expert property valuation service, but it can be risky. While you can quantify all the costs you paid for the property, it is challenging for property owners to put demand and supply and market trends in the equation. It’s still possible to have a look into some market listings and to have a high-level idea on your property valuation in Germany. However, every property has its own specificities, technical details and pricing drivers that only market insiders understand.

Real estate appraisers are people qualified to do thorough real estate market value assessment. The specialist will study the property and the surrounding area and appraises it based on established procedures,

A real estate agent can also help appraise your house. Real estate agents usually use sale comparison approach especially for city center properties. An experienced real estate agent who has a deep knowledge about the real estate market in the area and understands how works the prices over there, will give the right property valuation.

Furthermore, real estate agents are acknowledgeable about most recent real estate market trends and know at which prices was sold recent properties. Some real estate agents offer to value your apartment for free so it worth it to call for an expert service and avoid making a mistake on the current value of the property.

With the right property valuation from a specialist in Germany, you will not give out your house at unrealistic amounts because buyer will buy a house at an exaggerated price. Hence you avoid the risk of ineffective sale process, as some overpriced properties stay for a while on the market and loose gradually their appeal to local and international buyers.

This is especially the case of for active real estate markets large German cities such as Berlin, Cologne, Munich, and Stuttgart, and where the buyers screen frequently the offers on market. On the other side, selling a property at lower price than market will result into a loss in sale proceeds that can be material. When you hire an agent to run your property valuation in Germany, you’ll benefit from a team of experts who can advise you not only for the valuation step but also later at the sale stage.

Above all, if you need a value assessment and advisory in English, you can search on the web and contact an English-speaking valuation company in Germany.

New build properties benefit from best property valuations in Germany
Parks and green areas impact positively the property valuation in Germany

Which professional choose for your valuation?

There are many factors that are considered for real estate valuation in Germany. If you are not sure of how the market works, you are better off leaving the value assessment to a professional. Professionals are not all the same, one should go for the best market experts to secure the most effective property valuation service.

Otherwise, property value assessment will account for everything in your house, including equipment. Once it is done, the specialist should put everything in writing. You can see a breakdown of what makes up the house’s worth and have an accurate idea on the value range of your flat. A professional property valuation in Germany will show the real worth of your house and allow you to determine the price range for selling based on the calculated value of the house. 

If you don’t speak German, you can choose one of the few international agents in main German cities (for example in Berlin) so that you get everything explained in English.

Which topics to raise with your valuation expert in Germany?

What are the main selling points of your house? What kind of buyers does your house attract and where to get them?

What has been the price of similar recently sold houses in the neighbourhood? What would be a realistic property valuation in Germany’s to sell under current market conditions? How much it would take to finalize the selling process? What services are included in case I decide to go ahead with the sale process?

Those are typical questions that you might ask a real estate agent. It is the duty of a specialist to know about the local conditions, real estate market trends, sale process, sale duration, steps. Also do not hesitate to inquire about the sale strategy that the Agency will implement when you decide for the sale.

In addition to valuation process for residential or commercial property, an agent can devise the best marketing strategy. The strategy should be customized to very situation. For instance, if your apartment is in one of the international German cities such as Munich, Berlin, Frankfurt or Hamburg, it makes an international real estate agent. International agents offer optimal visibility and can help you more in this case to get the best price, thanks to their prospective global buyers’ base.

The added value you get with a real estate expert

A professional property valuation in Germany allows you not only to have clear view on the value of your apartment but to individualize the marketing strategy based on prospective customers. In addition to his prospective buyers, the Agent chooses the best marketing strategy to target, in the most effective way, the potential buyers for your property. The property valuation depends also on the capability of the agent to get you the best and most creditworthy buyers both locally and internationally.

An agent with larger outreach will obviously offer you a better valuation than a local one. This is especially the case when your property is located downtown of a large international city. In this case, it’s likely that you need an international agent so that you would not only target local buyers, but also reach international buyers and investors worldwide.

For instance, in an international city like Berlin, over half of buyers are international or expatriate as well as English-speaking. It’s obvious that you should go for an English-speaking international real estate agent for your German property valuation.

How much is your property worth in Germany?
The value of properties in Frankfurt has significantly increased last years

Key takeaways for your property valuation in Germany

Real estate valuation in Germany is a quite technical process so better to hire a specialist for this.

The Agent that you hire need to have solid references of recently sold properties in the area. In addition to an accurate value assessment the agent can advise you about the sale strategy and process.

If you sell a property in Berlin or any other international city of Germany, it makes sense to hire an international agent. In the German capital, First Citiz Berlin is one of top-rated international real estate agents and best options for English-speaking services. First Citiz Team offers a free and non-binding property valuation in Berlin as well as comprehensive sale service covering all the steps of the property sale process.

First Citiz is a leading agent for real estate valuation in Germany

 

Get in touch with First Citiz Team:

  • Phone: +49 30 41 71 72 74
  • Email: contact@firstcitiz.com
  • Address: Pappelallee 11, 10437 Berlin
  • Opening hours: Mon-Fri from 9h to 18h