How do I determine the price of my property?

In divorce proceedings, the question often arises as to what should happen to jointly owned property. If a sale is to be made, the price must be precisely determined. If you want to know the value of your property, this can be calculated using various methods. Each method has its specific applications. An expert can help you find the right method and calculate the appropriate asking price.

There are various methods for valuing real estate. These methods are prescribed by law. Section 8 of the Real Estate Valuation Ordinance specifies the comparative sales approach, the land valuation method, the income approach, and the cost approach. These methods are based on different calculations.

The comparative value method

The comparative valuation method determines the value through relevant comparisons. It is therefore particularly suitable for condominiums, fractional ownership units, and family homes. The purchase price of comparable properties serves as the basis for this method. Crucial factors include the year of construction, the address, the living space, and whether a garden/balcony and garage parking space are present. Equally important are factors such as the construction method, the size, the remaining useful life, and the building's structural and energy-related condition.

The income approach

The income approach, on the other hand, is used for properties that generate income. This includes rental properties, mixed-use properties, and commercial properties. The property's value is calculated from the land value and the expected income. The calculation uses the market rent, not the actual rent. Therefore, a vacant rental apartment does not reduce the price. The property's operating expenses are deducted from the expected income. The land value is calculated based on the standard land value per square meter determined by an expert committee. The land value is then compounded using the capitalization rate, which is based on the market value. Other factors that can influence the value also play a role. Urgent renovations that have not yet been carried out can reduce the property's value.

The asset valuation method

Another method is the cost approach. In this method, the land value is also determined and added to the building's value. The building's value is calculated using the standard construction costs and the building's footprint. Construction costs are divided into different levels, taking into account the quality of the materials used. Depreciation due to age is then deducted from these costs. The legally stipulated useful life for condominiums and single-family homes is generally 80 years. This means that 1.25 percent of the value must be deducted for each year of age. The resulting calculated building value is then added to the land value and multiplied by the market adjustment factor. This factor considers the local conditions of the property. For example, a house in a strong economic area is assigned a higher value than a structurally identical house in a weak region. The calculation also considers whether houses in the neighborhood where the property to be sold are typically sold at the calculated preliminary cost value.

Do you want to have your property professionally appraised, but don't know which method is best? Contact us! We'd be happy to advise you.

Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

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