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Property valuation:
How banks and insurance companies valuate properties

MoneyPark property valuation

With MoneyPark you benefit form a free property valuation when buying or selling a property, either directly online or through our experienced advisors.

Valuate a property now

What price is the market willing to pay for a certain property? Depending on whether you ask the seller, an interested buyer, the mortgage provider or a broker, you will get different answers and opinions. A property valuation considers regional market developments and provides you with a realistic price indication. The value of a property is especially important for persons who take out a mortgage, because the property value defines the required mortgage amount. With MoneyPark you have now the possibility to valuate a property for free, either directly online or through our experienced advisors.

Property valuation

Property valuation for buyers

For laymen it is quite difficult to properly estimate the value of a property. You don't want to pay too much for the property, using more financial resources than necessary. But if you hesitate too long because you are not sure whether the purchase price is justified, someone else could snatch away your dream house. A property valuation provides you with a reliable price indication of a property, thus facilitating the purchase decision.

Benefit from a free property valuation before buying your dream house.

Property valuation for sellers

There are many possible reasons for selling a property: your private or professional situation may have changed or you found a new property that you plan to move into. In any case it is helpful to get a neutral impression of the value of the property before starting the actual sales process. A property valuation is a great opportunity to do so.

When selling a property, our free property valuation provides you with a realistic indication of the price that you can ask for.

Computerized valuation: Compare prices of properties quickly and with minimal costs thanks to database tools

Property valuation based on online tools is also known as the „hedonic method“. The most used software in this context was developed by Wüest & Partner, Immotec and IAZI. The main benefits of an online valuation are the low cost and effort required to perform it. In a first step, the user enters the required information, e.g. size and location of the house or apartment. The online tool then compares the received information with a database that contains the corresponding information about thousands of other properties. Smart algorithms are then used to determine the value of the property. This kind of valuation is available from CHF 65, for most properties the costs are CHF 200-300.

When the seller of a property does a valuation himself using online tools, the resulting value will often be too high. A common reason for this ist that the seller is emotionally attached to the property and therefore rates its condition better than it actually is. This is why the hedonic method may bias the value of the property. While this method works well for standard properties and therefore is also used by banks and insurance companies to assess the value of properties, it is often not suitable to valuate special properties. Special properties include very old properties, properties with large premises, but also connoisseurs pieces as well as luxury properties.

Expert valuation: The more expensive, but also more detailed method

If a more detailed valuation is required or the property features special characteristics, an expert valuation conducted by a property expert is the preferred method to valuate a property. The expert does not only assess the value of the location and the features of the property, but also considers building materials, recent renovations, the floor plan, the land register record as well as the cadastral plan. Based on the gathered data, the expert then uses a sophisticated formula to assess the property value. The expert also creates a comprehensive report where he explains all the points that led to the final valuation result and points out value increasing and value decreasing factors, e.g. investments into the property that were done or required renovations.

This more detailed method of valuation comes at a price. An expert valuation for an apartment is available from CHF 500 and a valuation for a single-family house from CHF 700. For more complex properties, the costs may easily amount up to CHF 2'500. However, even for an expert it is not possible to name the exact value of a property as there is always a certain room for interpretation, but the valuation result of an expert that knows the local market usually deviates no more than 5% of the actual price of the property. The valuation becomes more reliable if not only one but at least two experts valuate the property, however, this also significantly increases the costs.

A property valuation is required to receive a mortgage from a bank or insurance company

Banks and insurance companies valuate properties before they provide the buyer with a mortgage. A study conducted by MoneyPark showed that banks make use of the expert valuation method more often than insurance companies. However, both banks and insurance companies mostly rely on tool-based property valuations. Currently, valuations conducted by banks and insurance companies result in a value that is lower than the price that the seller of the property asks for. MoneyPark figures show that the higher the price that the seller asks for, the relatively lower the valuation result. This shows that mortgage lenders have become more cautious as they comply with legal regulations such as the lower value principle. The lower value principle states that the lowest property valuation result is used for the calculation of the maximum mortgage amount. Example: the purchase price of a property is CHF 900'000, but the bank's valuation assesses the value to be CHF 800'000. The borrower will then receive a mortgage that is calculated based on the value of CHF 800'000, which means he will require more own funds in order to purchase the property.

As an independent mortgage advisor, MoneyPark offers expert advice on the topic of the lowest value principle. We show our customers what can be done in case they are not satisfied with the valuation of a property and compare the offers of many different mortgage providers. A thorough mortgage comparison that includes offers from banks, insurance companies and pension funds is the best way to get the most favorable terms for your property financing.

Current mortgage rates

LIBOR mortgage from 0.56%
Fixed-rate 10 years from 0.95%
Fixed-rate 5 years from 0.71%

The displayed interest rates are the best rates currently available. Your personal interest rates may vary depending on LTV, affordability, mortgage amount and the location of the property.