Buying property anywhere in the world requires you to first value it to determine how much it’ll cost. Property valuation is needed to ensure that you’re buying viable real estate property and to ensure that all incurred charges are actually suitable for the property of your choice. It determines whether pricing is unfair or reasonable.
Property valuation considers the economics, the physical location, the taxes, and the future prospects of a property.
Property appraisals are only estimations of a property’s value because there are many different techniques to establish a property’s worth and because each method is based in part on educated guesses. The three primary methods for figuring out a property’s value are the cost approach, the income capitalization strategy, and the sales comparison methodology.
What are the three methods for valuing real estate ?
One of three methods can be used to complete property values. Value is established using the sales comparison method by contrasting the costs of comparable properties. The price of an existing property is contrasted with the projected cost of constructing a new one in the cost approach. The value of a property is determined using the income capitalization approach using projected future income.
Now that we understand the real estate valuation factors in Germany. Let’s discuss how you can buy property in Germany after successfully getting it valued.
How To Buy Property in Germany ?
When you want to buy property, it is important to ensure that you create a checklist and tick some important points. The most important things to note include:
Search For Value Drivers
Value drivers are key factors that determine the cost of the property. Some of them include proximity, transportation, commodities, etc. Proximity to transportation services, shopping malls, tourist centers, etc is always important.
During the property valuation, the following inquiries must be addressed:
- What is the state of the residence or apartment ?
- Has it been properly cared for ?
- What kind of construction materials were used, and when was the house built ?
- What number of flats does the building have ?
- How big is the property, in square meters ?
- Does it require remodeling ?
- Does it have quality machinery and contemporary heating and sanitary systems ?
- Does it adhere to the current energy requirements ?
Here, it is especially important to take into account the unique characteristics of your property. If the property is rented, additional factors are taken into account while valuing it, including the vacancy rate, the tenants’ viewpoints, and the rental fee per square meter.
Why proximity is important
For families, it is important to be close to schools and places of work. Proximity is highly dependent on your preferences as a buyer. The property’s location, which has micro and macro layers, is also very significant.
The local environment is referred to as microlayers. Are there any local hospitals, shops, or cafes? The larger environment, such as the district, is referred to as the macro layer. A new traffic link may be advantageous as a place develops, as opposed to the development of a busy road in front of the property.
All of these elements are compared to one another, and the property is contrasted with comparable ones that have already sold. When valuing the property, it is also necessary to consider the city in which it is situated. The real estate markets and laws are distinct in each of the top seven German cities.
Secondly, you need to consider the cost of transportation and if it can fit into your budget. How far you’ll have to drive, and how much you spend on gas when you drive from there to any consistent destination.
Furthermore, you need to ensure that the building is in peak condition. All the right facilities are present within it and they’re working fine. If these aren’t present, find out the cost of maintenance and the owner’s stand on repairs.
You also need to look at things like space optimization, colors, wall spacing, the presence of pillars, and other structural qualities that appeal to or repel you.
Buy Through A Realtor
It is always important to purchase property through reliable sources. A property valuation agent in Berlin ensures that property valuation is done correctly and that you get the best value for your money. They also make it easier for you by ensuring that you don’t have to visit properties that don’t fit your preferences.
Furthermore, good realtors come with a portfolio which allows you to get a general overview of the available properties before you actually have to visit them.
Another important reason to patronize realtors is that they understand the market value of buildings better than anyone else, they can determine how prospective property will do in the future real estate market and if the buy is worthwhile.
Finally, it is always important to ensure that you notify your realtor about your budget and also purchase housing that not only works for your budget but is also comfortable for you.