It is well known that real estate that is valued at the right price will sell in the best possible time and under the best possible market conditions. A consistent evaluation of the value of the property - without underestimating or overestimating it - is all the more important for luxury real estate. It is imperative that value estimates be carried out by professional, trained brokers specializing in this market segment (properties valued at 5 million francs and more). Because luxury real estate is a world apart! Very often banks, insurance companies and architects evaluate real estate by the so-called "hedonic" method, especially in the context of financing. This type of estimation is a process of comparison of values, based on the market prices. Some brokers also use it to obtain a quick evaluation. As for the online price calculators, they represent a tool giving an indicative value of the apartment or villa in question. These approaches - although incomplete - can be useful when selling "common" and easily comparable properties; they do not work in any case for prestigious real estate.
When it comes to high-end properties, a great deal of emotion comes into play and acquisitions are often made on a whim. The approach and the valuation must be adapted accordingly. Only a professional broker is able to determine the market price of a luxury property in a reliable and objective manner. He will certainly take into account "classical" parameters, such as the location, the environment, the view, the orientation, the typology, etc. However, the combination of assets is not sufficient. The appraisal will have to integrate other qualities specific to this market segment, such as construction excellence, rarity, architectural features, charm and elegance. Thus, a complete expertise conducted by a broker specialized in prestige real estate will be able to answer these multiple expectations, because each property is unique.
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The Real Estate Journal
Page 15
Edition of October 5, 2022 n°48
Section - The experts : Real Estate
