Real estate appraiser – services, costs & what to consider
A real estate appraiser is an expert who professionally assesses the value and condition of a property and prepares an appraisal report. On the basis of this appraisal, you can, for example, as a real estate seller, determine a sales price in line with the market. Courts and authorities also often make decisions on the basis of a valuation report.
The most important in brief
- A real estate appraiser evaluates the location, condition, and amenities of your property to determine its fair market value.
- There are different types of real estate appraisers who prepare different types of appraisals – from brief appraisals to full appraisals.
- If you need a real estate appraisal because of a legal dispute or official matters, you must commission a proven expert such as a publicly appointed and sworn appraiser to prepare it.
Here you will find all the important points on the subject of expert opinions. The individual points are described in detail and are constantly supplemented.
A real estate appraiser is a person with special expertise who is able to determine the market value of a property due to his special know-how regarding real estate. The location of the property, construction defects, missed or completed repairs or modernization measures – all these things are summarized by the appraiser in a valuation report. On the basis of this appraisal, you as a real estate seller can, for example, determine a sales price in line with the market. In addition, a real estate appraiser can also evaluate the house or apartment in terms of its energy condition.
First of all, you should know that the designation “real estate appraiser” is not protected as a professional title in principle. However, if the appraiser has certain qualifications, things look different. Therefore, a distinction is made between certain types of appraisers:
Freelance real estate appraisers
Those who offer their services as “freelance real estate appraisers” do not have to possess any professional qualifications. Accordingly, the appraisal that such an appraiser prepares for your house is also not legally binding. As a real estate seller, however, you can use his appraisal without further ado as a basis for determining the selling price of your property, provided it is a regular sale without legal dispute or the like.
Publicly appointed & sworn appraisers
A publicly appointed and sworn appraiser for real estate is a proven expert in his field, as he is examined and certified by the authorities. He or she must have proven expertise, independence, objectivity and trustworthiness and is allowed to make officially recognized and thus court-approved calculations of market or fair value.
A state-approved expert for real estate is a real estate appraiser who is also certified by the authorities and is also under the supervision of the state authorities. In addition to court disputes, his or her valuation report can also be used for official purposes, such as tax assessments in the case of inheritance or donation.
When an appraiser conducts a real estate appraisal to provide an expert opinion, he or she considers all aspects that make up the value of the property. First and foremost are:
Is the property located in an attractive location with good infrastructure and in a sought-after district? This also increases the value of the property.
What does the house or apartment look like in detail? For example, are there balconies, garages or a guest toilet?
How old is the property, has the owner maintained the property well and modernized it regularly or refurbished it if necessary, also in terms of energy?
What value is indicated in the standard land value maps at the address of the property? It is the basis for the valuation, because it is the average value of one square meter of undeveloped land in a given area.
Are so-called building encumbrances entered in the building encumbrance register, such as regulations that certain areas of the property may not be built on in order to maintain sufficient distance from the neighboring property? Building encumbrances provide information about the usability of a property.
Type and use
What kind of property is it anyway – a detached single-family house or a four-bedroom condominium? Or is it not residential at all, but commercial or retail space? The type of property determines its use and, accordingly, its value.
The decisive factor for the costs of the real estate appraisal is first of all what kind of appraisal you need. A comprehensive market value appraisal, which can quickly cover 100 pages and also stand up in court, is correspondingly more expensive than a short appraisal. You can find out more about the types of appraisals under the following points. The expected market value and the type of property also play a major role in determining the costs. Depending on the complexity of the valuation, you can expect costs in the three- to four-digit range. As a rule, you can orient yourself to a value of 0.5 to 1.5 percent of the market value.
As a general rule, the cost of hiring a real estate appraiser is freely negotiable.
Not all real estate appraisals are the same. Depending on the occasion, different types of appraisals are required or even mandatory for your home.
A short appraisal basically only provides a brief assessment of the value of a property. It comprises a few pages and can be used, for example, in a simple real estate sale without litigation. It is not even necessary to call in a certified real estate appraiser to prepare this appraisal; a real estate agent is often perfectly adequate.
Market value appraisal
A full market value appraisal is mandatory for all legal disputes concerning real estate (inheritance, divorce or forced sale). This form of appraisal can only be prepared by a publicly appointed and sworn real estate appraiser, as he or she demonstrably has the necessary expertise.
The value appraisal represents a kind of middle ground, since it is more informative than a short appraisal, but is nowhere near as extensive as a full appraisal. An appraisal is prepared, for example, when buying real estate by an expert from the bank that is providing the construction financing.
Find out here at a glance which appraisal you need for which occasion.
Real estate purchase & sale:
Anyone who is starting to think about selling real estate can use an appraisal as an initial decision-making aid for or against the sale.
If you are interested in a property, an appraisal will help you to assess whether the owner’s asking price is reasonable.
If a property is to be financed or if real estate assets are already available, an appraisal serves to determine the total assets. The bank uses this information to assess creditworthiness.
Inheritance of a property:
If a community of heirs is divided and a legal dispute is imminent, the value of the property must be determined in a court-approved manner in order to divide the inheritance.
If the community of heirs is not in dispute, the real estate value serves as the basis for dividing the inheritance.
If there are disputes with the tax office about the amount of inheritance tax, the real estate value must be determined in a court-proof manner.
If there are disputes with the tax office about the amount of gift tax, the real estate value must be determined in a court-proof manner.
If a property has been partially incorporated into a business asset or is used in the event of the business being discontinued, the owner must declare the corresponding value to the tax office.
If no amicable agreement can be reached on the division of assets during the divorce proceedings, the value of the real estate must be determined in a court-proof manner.
If the spouses agree on how to divide their assets, they are free to decide how to value the assets and thus also any existing real estate. An appraisal is very helpful as a basis for decision-making.
Building defects and insurance claims:
If it is a matter of construction defects on buildings, a documentation of defects or an expert opinion on damages must be prepared in order to be able to assert claims against the construction company.
If insurance claims are involved, a damage report serves as the basis for any claims against the insurer.
Prior to a foreclosure auction, a market value appraisal must be filed with the district court so that bidders can obtain information about the property in advance. The market value determines how high the minimum bid must be.
When an appraiser evaluates your home, he or she requires certain documents depending on the type of appraisal. For a brief appraisal, far fewer documents are required than for a comprehensive market value appraisal. The appraiser who evaluates your property will tell you exactly what documents he needs from you. As a rule, the following documents are always included:
- Land register excerpt
- Energy certificate
- Site plan
- Excerpt from the cadastral map
- Excerpt from the building encumbrance register
- Building plans and floor plan
- Living space calculation
- Proof of repairs and modernization
If your property is a condominium in an owners’ association, the minutes of the last three owners’ meetings are also required, as well as the partition plan, the declaration of partition and a list of ancillary costs.
You want an appraiser to value your property accurately? Then check in advance what kind of appraiser has to appraise your house at all or what kind of real estate appraisal you need. For appraisals that are to stand up in court, you absolutely have to hire a publicly appointed and sworn real estate appraiser. To be on the safe side, ask to see the chamber stamp and identification card. Furthermore, the objectivity of the real estate appraisal should be a priority in the selection process. To maintain credibility in front of buyers or in court, do not commission good acquaintances or relatives to prepare the appraisal.
Once you have found an expert for the real estate appraisal, it is essential to determine the fee for the expert’s services in advance, as this activity is not normally subject to a fixed fee ordinance. If problems arise with a publicly appointed real estate appraiser, contact the supervisory authority or the relevant chamber immediately.
You do not want to search for a suitable appraiser for your property on your own? Metahome24 can help you find your way through the jungle of appraisers. Just let us recommend you an expert for real estate valuation! If necessary, we can also find a suitable expert to help you sell your property.