In real estate sales contracts, the valuation helps both the seller and the buyer, as it provides the seller with a guide on how to sell the property at the best price, and the buyer can use the valuation to assess whether the purchase price of the property is realistic. In many cases, the buyer will need a loan to supplement his own financial resources. The availability of the necessary bank loan depends on a number of factors, and the result of the property valuation plays an important role in this process. Banks usually require a valuation to make sure that the property provides sufficient collateral for the loan, so it is worth asking for a preliminary valuation before signing the contract of sale, so that the buyer can assess whether he can obtain a loan for the property he wants to buy.
The valuation helps:
In market-based decision-making: the information provided by the valuation is essential when concluding a sales contract. If the appraised value is lower than the price asked by the seller, the buyer may be at risk of signing the contract.
The basis for negotiation: the results of the valuation allow rational arguments to be used in negotiations between buyer and seller. For example, if the valuation supports the buyer’s proposed lower price, this strengthens the buyer’s position in the negotiations.
In the loan application: knowing the market value of the property is important for financial institutions, as it ensures that the amount lent is proportionate to the true value of the property. This means that the process of granting a loan is closely linked to the sales contract.
What does the valuer look at?
The task of the valuer is to determine the realistic market value of the property on the basis of professional criteria. Here’s what he takes into account during the valuation:
- Property Type and Characteristics
The valuer first looks at the type of property (apartment, detached house, land, etc.) and its characteristics. Important aspects include:
- Floor area: the size of an apartment or house has a major impact on its value.
- Number of rooms: the number and distribution of rooms is also an important factor.
- Amenities: furnishings, appliances and the condition of the property (e.g. renovated or to be renovated) all affect the value.
- Location
The location of the property is one of the most important factors:
- Surroundings: the quality of the neighbourhood, the infrastructure (schools, shops, transport) has a major impact on the value of the property.
- View and orientation: a nice view or sunny orientation can also increase the value of the property.
- Market Trends
The valuer also monitors market trends. Some important factors include:
- Prices of similar properties: the prices of similar properties sold in the area provide important information for determining value.
- Market supply and demand: both supply and demand conditions in the local property market have an impact on the value of the property.
- Legal aspects
The legal status of the property is also important:
- Ownership: clarifying ownership is essential.
- Loads and mortgages: If the property is encumbered, this may affect its value.
- Physical Condition
The condition of the property is a key factor in the valuation:
- Maintenance: well maintained properties are more valuable.
- Structural condition: the structural condition of the building, such as the roof, walls, foundation, also affects the value.
- Energy Efficiency and Sustainability
Modern consumers are increasingly looking at energy efficiency and sustainability:
- Energy efficient solutions: modern insulation, solar panels or energy efficient heating systems can increase the value of your property.
- Sustainable materials: sustainable materials used in construction can also be important.
When buying a property, many families wish to take advantage of the Family Homeownership Allowance (CSOK), but not all properties meet the conditions for applying for CSOK. An appraisal or preliminary valuation is essential for a successful transaction, so it is worth consulting the right expert to help you identify the criteria for the property before you sign the contract. While the CSOK Regulation aims to make the purchase or construction of a property more accessible to families, it does so in a detailed way, so it is important that families are well informed before starting the application process. This will not only make it easier to obtain the subsidy, but also make the family home-building process more successful. When buying a property, special attention should be paid to the requirements of the scheme, which are linked to both the personal situation of the applicant and the property’s characteristics. The valuation provides a sound basis for a secure contract of sale, while the contract allows the parties to complete the property transaction within a legally valid framework. Knowledge and proper management of both processes is essential for a successful property sale or purchase.
