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.
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 mortage rates continue to increase, this will have a negative impact on selling prices and real estate valuation in Germany.
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 neighbourhoods.
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