Real Estate Appraisal

Real estate appraisal – an important step in the process of buying and selling real estate

Real estate appraisal means estimating the price of real estate. It is clear that the seller's goal is to sell the property as quickly as possible and at the best possible price, but incorrect ideas about the real value of the property are often a major problem in the sales process.

Sometimes it is a house to which the client is emotionally attached, sometimes it is an apartment in a good location but in a poorly maintained building, in some cases the seller considers his neighborhood much better than it is on the market because he is used to living there, and there is also the inevitable “neighbor” who sold his property at a dizzying price.

In addition to the above situations in which sellers overestimate, situations in which sellers underestimate their property are not uncommon.

Whatever the reason, determining the optimal market price can be crucial for the sale. Sometimes even a few thousand euros can be crucial, especially when it comes to prices close to a “round” number. For example, buyers can search for properties in the price range of EUR 400,000 to EUR 500,000, and a property of EUR 503,000 will not even appear in the search. Experienced agents of the Regent Real Estate team know how to recognize such subtleties. With a free and reliable assessment, our agents help you to achieve a better position on the market with your property.

What does that mean?

When assessing the value of the property, our experts will visit your property and answer all the necessary questions about its value and the possible interest of potential buyers. This process includes the following steps:

Comprehensive property assessment

Our real estate experts will assess your home and find the most attractive features, such as location, property size, number of rooms and bathrooms, or parking options, and based on the above, determine the overall quality and living conditions that your home provides to potential buyers.

Location assessment

As an expert for your area, our agent assesses the attractiveness of the location to potential buyers. For example, the distance from educational institutions, shops, transport connections and similar relevant features are taken into consideration and analyzed. Based on the above, we also assess the quality of life in that area and state why it is ideal for living.

Competitive properties for comparison

Our agent assesses recent sales data in your property area to identify similar properties and their selling prices. This provides you with additional information about the market and details that may be of interest and useful to you.

What do buyers want?

After selling many properties in your area, our agent has enough experience and knowledge about what buyers are actually looking for, what their wishes and needs are, and how much they are willing to pay for their new property.

Property price assessment

Based on all the above findings, our agent estimates the approximate selling price of your property.

Do I need a property appraisal?

The decision to sell a property is not the only reason for its appraisal. There is no wrong time to find out the true value of your property because you are then able to make better, smarter and more meaningful financial decisions. So, when is a valuation a good idea?

1. If you are planning to renovate the property and want to know what local buyers will value most and find most attractive
2. You are completing a renovation and want to know what impact the renovation will have on the market value of your home
3. The market is constantly changing, and you want to know how it affects the value of your property
4. You are thinking about refinancing and want to know how much you would increase the value of your home
5. You are thinking about renting your property and want to know how much possible rental income is

What methods are used to assess the value of real estate?

Today, there are different methods for determining the value of your property. As a rule, we distinguish three approaches:

The comparison method of sale is usually used for private residential properties for which there are comparable properties. In this case, “comparable” means that the properties are similar in location and characteristics such as square footage and room layout.

The cost method is used for residential properties with too few or insufficient comparable properties on the market. This approach involves calculating the cost of building the property being valued. The value of the property is then determined by subtracting the potential overvaluation that has occurred.

The income method is applied if the property is rented out or used commercially. This involves calculating on the principle of how much final income can be expected from the property. This approach is especially interesting for properties used as capital investments.

Several factors influence the price at which a property can be offered on the market, namely:

• Property location
• Living area and plot size
• Number of rooms
• Age, building structure and general condition
• Additional features (balcony, terrace, attic, garden, garage, swimming pool, etc.)
• Ease of access
• Overall impression
• Market conditions and recently sold similar properties
• In addition, features such as the architectural style of construction can also have a significant impact on the price of the property. Elements such as designer furniture and decorations can also further stimulate customer demand and increase the value of the property.

When a buyer intends to finance through a bank loan, an official property value assessment is used.

The assessment of the value of real estate is carried out by authorized permanent court experts and appraisers according to the Law on the assessment of the value of real estate, whose powers arise from special regulations governing the work of the courts and expropriation procedures. They are the only ones officially authorized to make assessments that are used for official purposes.

The market value of real estate is estimated using three methods and seven procedures, and the method of data collection is also prescribed. There is no rule as to how long the assessment takes and how long to wait. It depends on the agreement with the client and other factors. However, in practice, one waits from three days to a week for an assessment. Depending on the complexity of the project and the square footage of the property, the service costs on average from EUR 200 to EUR 330, but banks often take over the cost of the assessment if it is a loan.

In addition to everything they see in the field and in the documentation, experts use the eNekretnine system in their work. It is a database in which all transactions on the real estate market are entered. For each property, the area, square footage, type of property is recorded: apartment, house, business premises, agricultural, construction or forest land. Achieved prices can also be seen in this system. The eNekretnine system enables authorized appraisers and real estate agents to easily access the data that is the basis for their quality professional work. The database contains data on the number of transactions for a particular area, types of real estate and data on the real estate that was the subject of the transaction, achieved prices, etc.

Appraisal report

The assessment of the value of real estate is presented clearly and transparently in writing, i.e. in a document called an appraisal report, which includes:

• findings and opinion of a permanent court expert for real estate appraisal or
• assessment of a permanent court appraiser

It is a credible document for making decisions in administrative and judicial proceedings and for making investment and other decisions. An appraisal report that is not prepared in accordance with the Law and Regulations is invalid. The following are used to assess the value of real estate and derive the necessary data:

• purchase prices and other data, such as rents, leases, management costs
• set of property characteristics that are not influenced by unusual or personal circumstances.

Whether you need help determining the price of your property or a professional official appraisal, contact the Regent Real Estate team and together we will find the ideal solution for your specific case.