Market value: The realistic market price of your property
The market value is the value at which your property can most likely be sold. It forms the basis for the asking price in exposés and property adverts. Property sellers are usually guided by this value and use it as a basis for negotiation. A small mark-up of around ten per cent is often applied to enable price negotiations at a later date.
When to offer below market value?
In regions with lower demand and many properties on offer, it may even make sense to offer the property slightly below the market value. This increases the chance of attracting interested parties and speeding up the sales process.
When demand exceeds market value
In urban areas with high demand, on the other hand, there can be a real bidding war. Here, prospective buyers often outbid each other so that the final selling price achieved can be significantly higher than the market value. This is initially pleasing for sellers, as it means higher proceeds are possible.
Keeping an eye on financing
However, you should exercise caution with excessive prices. Banks generally only finance property up to the market value. If an interested party's bid exceeds this value, the difference must be covered by equity. You should therefore check whether the bidders actually have sufficient equity or can already present a provisional financing commitment from their bank. In this way, you can avoid a supposedly high sales price ultimately failing due to a lack of financing options.
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Robert Schüßler
Property valuer (EIA and IHK)
