Property valuation: how a price that holds is built
A valuation is not a forecast. It is an evidenced position on what a property is worth today, with clear assumptions and limits.
01
The three levels of value
Market value, value to a specific buyer and sale price are not the same. Market value comes from comparable evidence. Value to a buyer depends on how they will use the property. Sale price is the result of negotiation.
Confusing the three leads to wrong expectations. An owner can be right about the value of the property and still fail to find a buyer at the asking price.
02
Comparable data and adjustments
Prices of nearby properties are the base, not the answer. Floor, view, light, year of construction, renovation, service charges and time on market adjust the valuation. Every adjustment must be explained.
A valuation that cannot be explained does not persuade. A valuation that can be explained lets the owner defend the price and the buyer understand why it is reasonable.
“A valuation holds when it can be explained, not when it simply sounds high.”
03
Technical factors that change the price
Structural capacity, damp, old installations, energy performance and planning consistency affect the cost of use. A property with a good image and technical problems may need a significant discount.
Technical knowledge is not a detail for engineers. It is the reason a valuation can hold over time and through negotiation.
04
When a formal valuation is needed
For bank lending, inheritance, court cases or corporate decisions, a formal valuation follows specific standards. For a commercial decision, an evidenced opinion can be enough, provided it is independent.
The goal is not a paper with a number. It is a position that can be explained and supported.
This article is general information and does not constitute legal, tax or investment advice.
The Journal
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