How to estimate the value of your property?
When selling a real estate property it is necessary to estimate it. The objective when doing so, is to evaluate different aspects, in order to set a sales price that will be aligned with the market. A good estimation not only attracts more potential buyers, but also increases the chances of selling faster and in better conditions. Whether you want to ask someone to estimate your property or you want to estimate it yourself, here are the criteria to take into consideration.
Consider the Geographical Area
The first criterion, when estimating property, is the geographical area. It will be a decisive factor of the value.
On the one hand, the municipality will have a direct impact on the estimation of the house or apartment. Indeed, the real estate market can change a lot from one place to another. For example, real estate is generally more expensive in the city than in the countryside. This is especially due to accessibility and available infrastructures. There are also variations in prices between different cities. And the closer a town is to the capital, the higher the prices will be. Thus, when comparing similar properties, the ones in northern Luxembourg will often be more affordable than in the ones in the center.
On the other hand, the neighborhood in which the property is located in, must also be taken into account. If we take the example of Luxembourg City, housing is generally more expensive in the neighborhoods of Belair and Limpertsberg than in the ones near the train station or in Bonnevoie.
This is why an average price per square meter in a specific area must be considered. In addition to the geographical criterion, other elements can vary the price from 5 to 20%: a nice view will increase the value, while a common wall with a bar will reduce it.
Criteria Related to Your Property
Afterwards, the location is not the only element to look at when making an estimation. The unique features of the property are also important. Concretely, each house and apartment has specific characteristics, which will affect their value either up or down.
Among these features - which must be analyzed impartially, let’s not forget this - include:
- Indoor and outdoor surface area, living space or not. In regards to this, the ILNAS (Luxembourg Institute of Standardisation, Accreditation, Safety and Quality of Products and Services) has defined a norm in order to calculate the living space area of an accommodation.
- The typology of the property: house or apartment, number and size of rooms, etc.
- The date of construction or refurbishment.
- The overall condition; and therefor, the renovations that need doing.
- If there is a garden, a garage, any special equipment available, etc.
Again, all of these factors will increase or decrease the value of your property relative to the average price. For example, refurbishing a house will add 15 to 20% value to it. On the other hand, if renovations need to be done, then it will be necessary to reduce the price by 5 to 10%, or even 30% for major renovations.
To estimate the value of a property impartially and accurately, it would be better to use the services of a professional, such as a real estate expert or an agent.