Low standard land value: potential problem in property valuation?

We have found a plot of land that very closely meets our requirements. Currently, it is not yet developed; it has been fallow for a long time and is now being sold, with development planned in the coming months. The price per square meter including development is about 15% higher than what the municipality charges for developed plots, which would be acceptable to us for now. However, when looking at the standard land value for the relevant area, it has become apparent that this (as of 2012) is only 20% of the selling price. Our plan was to acquire the plot essentially from our equity and then incorporate it into the financing. My question or concern now is that the bank might base its valuation on the old standard land value, and consequently only credit 20% of our equity. This would call the entire financing into question. Would this actually be the bank's approach to valuing the plot, or would development and the fact that other buyers have also purchased in the area lead to an "upward adjustment"?

I have a similar problem, but not on that scale. If the price is 5 times (or 500%) the standard land value, then something's fishy – what's the reason? Are the municipality's plots assigned to a different standard land value class? Or could it possibly be due to differences between building land and non-building land? You need to come up with a bit more info... Or you could simply ask the bank. For example, in my case, the standard land value was €85, the bank would set €100 as the lending value, but the seller wants €120. However, the standard land value is expected to be raised to €100 due to purchases in the last two years. 20%, which still makes me doubt. Alternatively, you can also call the expert committee for standard land values (Landratsamt); they were very helpful to me.

Thank you . I took your suggestions to heart and called both the appraisal committee and the bank. The latter will get back to me tomorrow, but like you, the lady from the appraisal committee was extremely helpful within her means. She pointed out, among other things, that the standard land value only applies to "simple" development. Furthermore, she mentioned a possibly "preferred location" for the area to be developed due to transport connections, southern orientation, etc. In any case, she checked how many comparable plots in the surrounding area have a higher or equal price per square meter, and since 1995 there have been 31 of them. I didn't find that particularly spectacular, but she said this means the price is not necessarily exotic. When I asked whether a full development can actually quintuple the price per square meter, the answer was rather no, but it is a free market and not entirely unusual either. None of this really reassured me, so now I am waiting for the bank’s assessment, which I hope to receive tomorrow.

I had a similar situation. In the financing offers, the standard land value was always requested and both insurance companies and banks presented me with ready-to-sign offers. When I then wanted to take out insurance, they suddenly claimed that the value of my property & house was much lower and therefore the loan-to-value ratio was no longer correct. After weeks of negotiations, they backed out! Idiots! For the valuation, they inquired at Sprengnetter. It is a service provider for property valuations. You can also have the valuation issued yourself for about 30 EUR.

Well, I simply switched to a bank (Ing-Diba) and everything went smoothly there.

Banks are more willing to take risks with property financing because their requirements are less strict. In my case, the valuations via standard land value and Sprengnetter do not correspond to the reality on site at all. The criteria are far too inaccurate and too rough.

Hm. Do you then advise against an appraisal by Sprengnetter? I wanted to inquire about that now, just to know how much too much the seller is asking for. I’m willing to pay a few € more myself, but there is a limit somewhere.. But what if the values have no significance?!

The seller is not asking for too much! It's a matter of supply and demand...

15% above the price of community land is still acceptable.
By the way, the land reference value is only a GUIDELINE and applies to predefined parameters (e.g., utilization, size, etc.). There can and will always be significant deviations upwards and downwards. The bank makes a rough valuation from the desk; it can (but does not have to) use the land reference value as a reference, or IMMO-Scout comparison values, or its own experiences in the region, or any other sources.