The comparison value method is defined in Section 13 of the Real Estate Valuation Ordinance(ImmowertV). On this basis, the procedure for determining the value of real estate is legally recognized and clearly laid down in the ImmowertV. With the comparative value method you get the market value of the property. The property is compared with similar properties that have already been sold and the purchase prices actually achieved.
In real estate valuation using the comparative value method, the real estate market is included, which is very important for the private real estate seller, as this is the best way to present transparency and the value determined is best understandable. No matter how great an apartment or a detached house is, if the demand is not right, it is difficult to find the right buyer who will accept a high price.
In the field of online real estate valuation, the comparison value method is included in the background.
This is how properties are valued
For the property valuation using the comparative value method, you must provide information about certain characteristics of your property. This data is then compared with that of other properties - mostly based on a database.
The following key figures with the comparative value method are required to calculate a property value:
- Location of the property (also main or side street)
- Size / s (property, living space, usable area)
- type of building
- Equipment quality
- Structural condition (refurbished, not refurbished, last modernization)
- Energetic condition (thermal protection measures after 1990)
- Construction (solid, prefabricated, timber frame construction)
- possibly income from rents
LOCATION, LOCATION, LOCATION - One of the most important factors in real estate valuation and not just a slogan for price gouging. After all, when purchasing a property, you can change everything about the property, but you only choose the LOCATION once. The location has a significant influence on the market value of every property. A good location is characterized, among other things, by the transport links, medical care, shopping, schools, local recreation and cultural opportunities.
Direct and indirect method
The comparison value method for real estate can be carried out in two different ways.
direct procedure With the direct comparison value method, the value can only be determined from a recently sold and similar property in the neighborhood. Of course there is a lot of coincidence for these special requirements. That this is not that easy is self-explanatory because the coincidence of selling exactly the same property in the neighborhood is extremely rare.
If, for example, the size of the property to be compared differs only slightly from your property or property, you can still use the comparative value method with a certain formula. The following example for determining the comparison value.
Formula direct comparison value method: Property with 140 m² living space, the only comparable property sold in the vicinity of 80 m² living space, achieved purchase price of € 325,000
325,000 € / 80 m² living space x 140 m² living space = € 568,750
indirect method You haven’t been able to find a suitable comparison object nearby? Then you choose the indirect comparison value method. In this process, a comparison value is taken from an expert database in order to determine the market value of a property. This is a comparative price per square meter. so this is determined as follows:
Formula indirect comparison value method: Property 140 m² living space, comparison price from the database 1,700 € / m² 140 m² living space x 1,700 / m² = € 238,000 market value
Several comparison prices should be included in this comparison value method in order to reflect the informative value of the price range. They usually get different values. The average value is then assumed to be the market value. Nevertheless, individual characteristics of your property are also taken into account, and if necessary, surcharges or discounts are included so that you know what your house is worth. Information on the comparison prices and their special characteristics of the comparison objects can be obtained from the city’s expert committee, but mostly only for money.
Further information on the procedure - wikipedia.org - on the article