Usual price

This form of price is set by legislation and is based on an analysis of past property sales. In setting this price, sales prices of similar properties are compared. The expert needs a sufficient database of sold properties with information on location, dimensions, amenities and photographs of both exterior and interior.

Banks often use this price to value properties for mortgage purposes. Other situations in which this price is used include probate proceedings, litigation, auctions, foreclosures and valuation of property when forming a company.

This is often confused with the term "normal price". The term 'value' carries a degree of uncertainty and subjectivity. Market value is an estimate of the price at which a property could be sold. Although it is based as a normal price on the sale prices of similar properties, it also includes the asking prices of advertised properties and the expectations of the market. This value may also take into account rental income or the cost of building a similar property.

This type of price is applied in situations where a normal price cannot be determined because there is minimal trading in similar properties. For example, this may apply to a house built on someone else's land.

Market value of the property

This figure is included here for completeness. It is not a price provided by a real estate appraiser. It is the actual amount for which the property was actually sold. Normally, it is an agreed amount between two independent parties, which is set out in the sales contract.

This price may reflect specific circumstances and may differ significantly from property prices in the surrounding area. For example, if you live in an apartment that suits you very well, have great neighbours and don't want to move but need more space, you are likely to be willing to pay a higher price than applicants who have many similar apartments to choose from.

Price established

This value is also referred to as the official or administrative price. It is determined in accordance with the Property Valuation Act and the relevant regulations. It is often used for tax purposes and is often lower than the normal value. For example, in the case of inheritance and donation, only the ascertained value is used for the purposes of the tax authorities. If you have received a property by gift and sell it before the so-called "time test" expires, the tax authorities may assess income tax in certain situations. The tax is calculated on the difference between the sale price and the assessed price at the date of the gift. As the price established is usually lower than the normal price, the State benefits from using this price for its purposes.

The price established is also used to determine compensation in public expropriation, such as road construction. It is also used in situations where neither the normal price nor the market value can be determined, such as the valuation of a share of a road.

In accordance with the current regulations, the valuer must always determine the appraised price when setting the normal price or market value. One of the few exceptions is the valuation of a property for the purpose of securing a mortgage loan, where only the normal price is determined.

How do I value real estate?

If you are interested in determining the value of your property, I will be happy to provide you with a free, no-obligation valuation. I usually work with asking price and market value to estimate what price your property could sell for. At the start of the sale, I suggest the optimal pricing strategy to ensure you get the highest possible amount for your property.