Property Valuation – How to Determine the Real Market Value?

Property Valuation...

One of the first questions every owner asks when considering selling a property is: How much is my property actually worth, and at what price can I sell it?

The answer is more complex than it may seem at first. The prices we see in property listings, the amount an owner has invested in the property over the years, or the price at which a neighbouring property was sold do not necessarily represent the market value of a specific property.

Market value is, above all, the value that the market is prepared to accept for a specific property at a given point in time. This is why a realistic property valuation is one of the most important steps before starting the sales process.

A valuation is not an attempt to lower the price

In practice, we often encounter situations where an owner expects a higher price than the market can justify at that particular moment. This is understandable. Over the years, money, time and effort have been invested in the property, and there is often a personal and emotional value attached to it that a buyer simply cannot evaluate in the same way.

The role of a real estate agent is not to convince an owner to sell their property as cheaply as possible. The goal is to determine the best realistically achievable market price, taking into account the characteristics of the property, its advantages and disadvantages, location, current supply and demand, and comparable properties on the market.

It is also important to distinguish between the asking price and the achievable selling price. The fact that a similar property is advertised at a certain price does not necessarily mean that it will actually be sold for that amount.

Setting the initial asking price too high can have the opposite effect. A property may remain on the market for a long time, lose the initial interest of buyers and eventually require a price adjustment. A well-positioned price therefore does not necessarily mean a lower price. It means a price at which the property has a realistic chance of finding a buyer while achieving a good result for the owner.

What affects the market value of a property?

Size and location are important, but two properties of the same size in the same location do not necessarily have the same market value.

When assessing value, it is necessary to consider the property as a whole: the year and method of construction, whether it is a new-build or an older property, the quality and technology of construction, energy efficiency, insulation, heating and cooling systems, windows and doors, layout, orientation, views, floor level, access, parking, as well as the condition and size of the outdoor area.

For older properties, it is also important to consider when and how they were renovated. Cosmetic improvements cannot carry the same weight as a renovated roof, façade, installations, quality windows and doors, or a modern heating and cooling system.

Contrary to what is often expected, furniture usually represents a smaller part of the property's overall value. Exceptions may include recently renovated properties with high-quality interiors, bespoke furniture or particularly valuable equipment that genuinely adds to the property's market value.

The potential of a property can also be important

When presenting a property, it is not always enough to consider only its current condition. It is also important to understand what possibilities it may offer a future owner.

At Marvel Real Estate, when relevant to the sale, we also try to examine the possibilities arising from the applicable spatial plan. These may include the possibility of extending or adding to an existing building, constructing a swimming pool or an auxiliary building, as well as other possible uses of the available space and land.

Such potential does not automatically mean a higher market value. A future buyer will need to make an additional investment in order to realise these possibilities. However, the possibility of extending a house, building a swimming pool or making better use of the outdoor area can make the property more attractive to a particular group of buyers and can be important when presenting it on the market.

Alongside real estate brokerage, we deal with questions related to spatial planning, construction possibilities and property development on a daily basis, which allows us to take a broader view when preparing a property for the market.

Construction possibilities depend on the applicable spatial planning documentation and the conditions relating to the specific property, while final confirmation of what can be built is provided by the competent authorities and authorised professionals.

Market valuation and formal property valuation are not the same

It is important to distinguish between a market valuation of a property for the purpose of a sale and a formal valuation carried out by an authorised valuer.

The valuation we provide as a real estate agency is informative and market-oriented. Its purpose is to help the owner understand where their property stands in the current market and what selling price may realistically be achievable.

In doing so, we take into account our experience of the local market, current supply and demand, the characteristics of the specific property, comparable properties, and the reactions and expectations of the buyers we work with on a daily basis.

A formal valuation by an authorised valuer is required when an official valuation is needed for a bank, court or other procedures in which a professional valuation is required. It is prepared according to the rules and methodology of the profession, which is why the formally assessed value and the market valuation for the purpose of a sale may differ.

A realistic price is the first step towards a successful sale

A successful sale does not begin with publishing an advertisement. It begins with understanding the property, its documentation, advantages, disadvantages, possibilities and the market for which it is intended.

Only then can we answer the question that matters most to every seller: How much can I realistically get for my property?

What matters most is not the price we can put in an advertisement. What matters is how much the market is realistically prepared to pay for that property.

At Marvel Real Estate, our goal is not simply to advertise a property, but to work together with the owner to determine its realistic market position, identify its advantages and present it effectively to potential buyers.

If you are considering selling a property on the island of Krk and would like to find out its realistic market value, contact us. Together, we can assess your property and its possibilities and take the first step towards a successful sale.

info@marvel-nekretnine.hr