Types of Property Appraisal and Valuation Methods
An initial price indication, a detailed market value assessment and an appraisal report do not automatically serve the same purpose. Before you commission a valuation, you should be clear about what the result is needed for and what scope the brief should cover.
The purpose defines the brief
If you are only beginning to think about selling, a rough guide can be helpful. For financing, a settlement between parties or court proceedings, different requirements may apply. Clarify the intended use with the recipient before you order a particular type of report.
Telling the three valuation approaches apart
The comparative value approach draws on suitable comparable properties. The income capitalisation approach looks at the income the property can achieve commercially. The asset value approach is based on the land and the building fabric, taking the applicable valuation bases into account. Which approach is suitable depends on the property and on the task at hand.
Compare the scope and the underlying data
Check whether an inspection, a review of the documents, the assumptions made, the valuation date and a rationale you can follow are all included. The label Kurzgutachten (short-form appraisal) on its own does not yet tell you what examination was actually carried out.
The limits of an initial online estimate
A digital result can give you a first sense of direction, but it does not automatically capture every structural, legal and commercial particularity. Without further examination, do not use it as a substitute for an appraisal that is required for a specific purpose.
A specific question about your property?