Valuation methods at a glance: The comparative value method

In a professional building appraisal, the comparative value method is often used if there are a certain number of comparable properties for the type of real estate in question. This usually includes condominiums, undeveloped land and terraced houses.

Of a metropolitan apartment can sometimes be found in the same house or street similarly sized and comparably cut housing units. This makes a price comparison easy. If there is not a sufficient number of similar properties in terms of location, size, furnishings, age, etc., this procedure should be dispensed with and the asset value procedure applied.

The purchase price collections of the local expert committee are used as the basis of a comparative methodology. Here, all notarized real estate transactions are collected and analyzed anonymously.

However, a qualitatively reliable assessment is only possible with a sufficiently large number of comparable sales cases. Alternatively, the standard land value map can be used, which is also maintained by the expert committees. The overview is derived from the collection of purchase prices. Here, among other things, the building use as well as the land value in the respective locations of the municipality are listed. With such a comparison, the real estate value can also be fixed.

In addition, the building expert will include surcharges and discounts when determining the value. If the property is exposed to environmental influences or is located on a busy road, these are malus points that reduce its value.

It is important to know that the value of a rented apartment that is to be sold as an investment is about 20 percent lower than that of an apartment that is vacant. This is because most prospective buyers are looking for a new home for their own use. If they want to move into a rented apartment, they have to give notice to the tenants of their own need. This type of termination is complicated and often lengthy.

You do not know whether the comparative value method is suitable for your property? We will be happy to advise you.

Photo: AndreyPopov

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