Perhaps you have inherited a property, or perhaps you have owned one for half your life and now a career change or some other development in your life means that you have to sell up. In either scenario, you are initially simply not in a position to know how much the property is worth. However, this knowledge is the first thing you need in order to sell the property without delay and at the optimal price.
This is why the first step in the sales process sees you contacting an estate agent or expert in order to get as precise a market valuation as possible. Of course, you may well already have your own notions regarding the sale price. You can always do a rough comparison of your property with another home in your neighbourhood that has recently sold. Or you can say that over the last decade, property prices in your region have increased by an average of 50 percent, meaning that you expect 50 percent more from the current sale price than you originally paid for the property. You can also use online comparison calculators to obtain a rough price estimate. However, none of this is much use to you.
That is because you are at the start of the sales process, which means you require two things: an intelligently calculated offer price and a pretty accurate notion of the profit you will actually generate. Let us assume that, as a rule, you cannot afford to be blasé about the difference between 30,000 and 40,000 euros. After all, you are simultaneously planning the next stages of your life. Perhaps you are aiming to buy your next property in a different city; perhaps you are facing a divorce, have to divide up your property assets and first need to establish how much money is actually involved. No matter what your current situation is, the exact market value of your property forms the essential basis for whatever you decide to do next.
Regardless of the property type, there are three possible approaches to valuing the property: the sales comparison approach, the cost approach and the income approach. Whereas the sales comparison approach is used to determine the market value by comparing yours with similar properties – owner-occupied apartments of the same size in the same building or neighbourhood, for example – the cost approach is based on the individual manufacturing cost of the property. The income approach is used exclusively for investment properties and establishes the value based on the projected return relative to the investor’s risk. However, without experience and an in-depth knowledge of the property market in your region, you won’t manage to usefully apply any of the valuation approaches. It is better to entrust this process to a property expert from the outset. And the quickest and most straightforward way to sell your property is to also leave the other stages of the sales process in the hands of a professional.
So what is the next step? Now that you know the exact market value of your property, you can set the offer price. For strategic reasons, we recommend setting the price ever so slightly below, rather than above, the market value. You will thereby generate increased demand and place yourself in a better negotiating position as you deal with a bigger number of potential buyers. How to go about the negotiations? Why not discuss this right away with your local professional estate agent?
Are you planning on selling your property and require a professional market valuation? Get in touch with us! We are here to help.
Additional information can be found here:
Disclaimer: This article does not constitute tax or legal advice in individual cases. Please consult a solicitor and/or accountant to clarify the circumstances of your specific case.
Photo: ©Bruno/Germany /Pixabay.com