Sale / Purchase
An assessment of market value (Verkehrswert) is an important decision-making tool when it comes to the sale and purchase of properties. The market value (Verkehrswert) is the price which is likely to be achieved for a property under typical market conditions.
The high persuasive power of valuations can be a great advantage, for example for discussions with investment committees advising capital investment companies in the sale and purchase of fund properties.
Furthermore the accurate recording of property characteristics and the market environment at the time of a transaction can help to avoid future legal disputes.
Financing / Lending
In addition to transactions such as sale and purpose, the most common reason for valuations is the financing of a property. A mortgage lending value assessment is the most important basis for the award of loans amongst banks, savings banks, building societies and insurance companies.
bulwiengesa appraisal GmbH has access to lengthy time series data relating to rents and yields gathered over the 30-year history of bulwiengesa AG, which supports accurate estimates relating to long-term value growth and for example the rationale behind assumptions relating to the capitalisation rate.
Our valuations are not only provided for existing properties. In the case of property developments we provide market values (Verkehrswerte) and the (preliminary) mortgage lending value. This provides an early indication of the economic feasibility of a project.
It is often a good idea to provide sensitivity analyses and scenario analyses in order to show which factors influence the implementation of a project. We can provide an analysis of the different variants to show which project scenario is the most profitable. We can also provide estimates based on the various use concepts, as required, in order to optimise the structure of construction projects in terms of future rental incomes.
Our valuations also show which factors can negatively impact the economic success of a project.
Many companies outside the property industry hold real estate assets which are accounted on the basis of fixed assets. The value of the real estate fixed assets is increasingly of interest to senior management and shareholders in the context of company strategy.
We provide market value ((Verkehrswert) reports for company accounting purposes, in accordance with the German Commercial Code (Handelsgesetzbuch) and International Financial Reporting Standards (IFRS/IAS). We also advise on accounting-related issues from a real estate perspective.
Real Estate Transfer Tax
The purchaser of a property must also pay real estate transfer tax to the tax authority. This is also the case in the event of a company merger or takeover including the companies’ property holdings and in the case of inheritances and gifts. The purchase price, which is ideally based on a valuation, is used to determine the amount of real estate transfer tax.
The party liable to pay tax can also reduce the tax bill on the basis of a market value report: it is possible that the valuation approach has determined a taxable amount which is above the market value (Verkehrswert) of the property. In this case the party liable to pay tax may use the valuation to prove that the “underlying value of the economic unit” (in accordance with Section 9 BewG, market value (Verkehrswert) is lower than the value established by the tax authority.
Due Diligence Process
Within the application of a commercial due diligence process involving the systematic review of a property as part of the purchase process, it is sensible to obtain an assessment of the market value (Verkehrswert). The value provided can be used to assess the property in terms of its suitability as an investment product taking into account the client’s investment strategy.
A SWOT analysis can be used to show the medium to long-term value enhancement potential and investment risk profile.
We offer our clients long-term forecasts (economic factors, capital markets) in addition to traditional property valuation services.