Assessment Purchase Price / Market Price Single-family House from 1900

Hello everyone,

my name is Jack. This is my first post in the house-building forum after reading passively for a long time. I hope you can help me get a realistic sense of the market value of a house, as I find it difficult to assess. The market seems to have been very volatile in recent months, presumably mainly due to the increased interest rates and the high gas prices.

I currently live with my wife and two children (7 & 5) in a rental. We want to move our place of residence closer to our families again and are therefore looking for an apartment or a house in Hessen. In principle, I really like renting and appreciate having little work and worries with ownership. Unfortunately, nothing has matched our requirements (5 rooms, garden, max. 2 floors, 150+ sqm, stylish, good walkable infrastructure) in the search area for some time. After broadening our search somewhat and also looking at apartments & houses for purchase, something recently came up that could fit. I would like to ask for your assessment; I am an absolute layman and this would be my first property.

It is a house built in 1900, part of a listed building ensemble, located on a plot of about 1000 sqm. The standard land value in 2022 is 750 euros/sqm. The house including the land was bought by a company specializing in the renovation of older properties with a focus on energy-efficient renovation. The rear part of the plot was used for the construction of two now completed & occupied semi-detached houses, which share the driveway & courtyard with the existing house. The house itself was extensively renovated in coordination with the heritage conservation office, including the roof structure/thermal insulation, dormers, skylights, façade insulation, base sealing, partly new windows, new front door, solar system for water/heating, and gas condensing boiler. The new energy consumption is 100 kWh/m2a according to the energy certificate.

The house has 4.5 rooms on two floors with 160 sqm, a 20 sqm balcony, a 20 sqm terrace, a reasonably sized garden, as well as a 40 sqm old, unheated dry vaulted cellar with a new floor. Furthermore, there is a garage and a parking space in the courtyard. According to the homeowners’ association, the house is allocated 1/3 of the plot, i.e., about 330 sqm. Overall, the house appears very well and high-quality renovated; the bathrooms and parquet make a very good impression. Since I have comparatively little knowledge about houses, I have also commissioned my own building surveyor to get an expert opinion on the condition, possible deficiencies, and value.

Here is my question: how do I determine a fair market value for the property? Are there any important details missing in my description? The seller is asking about 850,000 euros but has already reduced the price by 20,000 euros unsolicited. Fortunately, there is no real estate agent. I find it difficult to determine a fair price. For the land, I have a reference point from the standard land value, but I have difficulty estimating the house or the price per square meter, the garage, the cellar, and of course the profit for the company. Do you have any opinions on this?

Thank you in advance
Jack

Addendum, as I do not see how I can edit my post.

I suspect that there is currently little demand for this property. In relation to the asking price, it is comparatively small with 160 sqm and four rooms, has a high energy consumption compared to newer properties, is heated with gas, and has a small plot of land that is in [WEG] with two other parties. The shared courtyard directly borders the garden & terrace. I also suspect that 800,000 euros purchase price plus additional costs is difficult for many to finance, and the unsolicited reduction of the asking price is also, for me, an indication of lacking demand.

Monument protection is expensive, listed properties stay in the portals forever. You can rent them out because of (special) depreciation. For personal use, I wouldn’t tie myself to a listed property. I can’t do whatever I want and pay double or triple for every little thing. Not my thing...

Monument protection is expensive, listed properties stay on the portals forever here.
You can do it for renting out, because of (special) depreciations.
For own use, I would not get involved with a listed property. You cannot act as freely as you want and pay double / triple for every little thing.
Not my thing...

Hello SoL, thank you very much for the quick reply. The house is part of an ensemble, meaning that you are essentially restricted in the external appearance. Would that change your opinion?

I would generally deduct -15% there. The seller is currently still trying to enforce the 2020-2021 prices. Take a look at Mapio.net in the archive of your location, where you can also view old properties. But even there, prices have risen sharply in the last two years. That’s why I would bet that you can negotiate well on the interest rates. Because the energy consumption is more like that of a house from the 2000s. So it definitely does not correspond to modern new-build standards. You can argue well with that. Because heating costs will remain high. If the seller voluntarily lowers the price, I would proceed like that if I really want the house with all its advantages and disadvantages. You offer 695,000 euros and wait to see what happens. I could bet that your seller will still accept that price if no one else comes along. Because a little profit is better for the developer than none at all. The market has turned 180 degrees in recent months. It is a buyer’s market and no longer a seller’s market. You can negotiate well there. At the current interest rates, the house will not be sold at the overpriced price. A realistic price (from 2019, before the big real estate price spiral started after Corona) is about -15% to 20% off the asking price from my point of view.

Hello SoL, thank you very much for the quick feedback. The house is part of an ensemble, which means you are essentially restricted in the exterior appearance. Would that change your opinion?

I assume that would rather reinforce the assessment? I would definitely inform myself well in advance about what you have to consider when making changes to the house, facade, or outdoor area and with whom you need to coordinate. You are entering a dependency there, and being dependent on authorities can be really annoying. Otherwise, you state €750 BRW for 330m², which comes to just under 250k. If I subtract that from 800k, that leaves 550k for the building. That is already a stiff figure for 160m² with 100 kwh/m2a. 550k divided by 160m² is €3437/m², which is actually more the price you would expect for a new build.