Value is not the asking price
The asking price is what a seller hopes for. Market value is what an informed buyer would be expected to pay a willing seller under normal market conditions. The gap can be large, and understanding how value is estimated helps whether you are selling, buying or renting.
The factors that shape value
No single factor sets the value. A valuer weighs several together:
- Location: neighbourhood, access to services and main roads, and demand in the area
- Size: built-up area, plot area and plot shape
- Age and condition: building age, maintenance level, and any structural defects
- Finishes: quality of materials and fittings
- Permitted use: residential, commercial or mixed, and what planning rules allow
- View and frontage: sea or mountain views, number of bordering streets, and frontage width
The comparison method: what sold nearby?
This is the most common method for homes. The valuer finds similar properties that sold recently in the same area, then adjusts their prices for differences in size, condition, location and finishes. The more recent and similar the comparables, the more reliable the result.
The income method: for rented property
For investment property such as residential buildings and shops, value is based on the income the property produces. The valuer looks at actual or expected rent, deducts operating and maintenance costs and likely vacancy, then converts the net income into a value using a yield that reflects the market and the risk.
The cost method: for new or specialised buildings
Used where comparable sales are scarce, such as new or special-purpose buildings. The land is valued, the cost of building an equivalent structure today is added, and an allowance is deducted for age and wear. Valuers often combine more than one method to cross-check the result.
Why banks and courts need a formal valuation
When a financial or legal decision rests on the figure, such as a mortgage, dividing an estate, or a dispute, an informal estimate is not enough. The institution needs a report from a qualified valuer that sets out the method and data used and carries professional accountability. Each institution has its own requirements for the report and whose reports it accepts, so ask the requesting party about them in advance.
Instant estimate or certified valuation?
An instant estimate is useful early on: to get a rough range before listing a property for sale or rent, or to compare options before viewings. But it relies on general data and cannot see your property's actual condition.
A certified valuation includes a site inspection, detailed analysis and a formal report, and it is what banks, official bodies and major decisions require. Maarij Real Estate offers both: an instant estimator on its valuation page and certified valuation reports when you need them.
This guide is general information, not legal or financial advice; always confirm current requirements and fees with the competent authorities.
Frequently asked questions
What is the most important factor in a property's value?
Location is usually the strongest, but it does not work alone; size, condition and permitted use can make a big difference between two properties in the same neighbourhood.
Is an instant estimate enough for a bank?
Usually not. Banks require a certified report from a qualified valuer; an instant estimate is only suitable for a first indication.
Will the valuation match the final sale price?
Not necessarily. A valuation gives the expected market value, while the final price also depends on negotiation, each party's circumstances and timing.