Paying off personal loan + creditworthiness

So market value is always the sale price?

No, it is not

The market value is the estimated amount for which a property asset should be exchanged on the valuation date between a willing seller and a willing buyer, after an appropriate marketing period, in a transaction conducted in the ordinary course of business.

So if you sell below market value, it is not the market value as you claimed, but the sale price.

I don't want to keep harping on it but again. Why should I as a seller sell below market value? Only if the market value is not achievable, so it is de facto the market value for this asset. Even in new development areas, there are price differences when selling privately. There is the standard land value as a reference and then the prime best location cream piece of land and the third-row edge property next to the main road. We are always talking about a functioning market here.

Nowhere does it say that the property was paid for out of equity.

If he wants the property to be credited as equity, it also must have been paid for out of equity. Otherwise, the question makes no sense...

Why should I sell below market value as a seller?

Because I have enough money myself, don't need the property, and want to make friends happy. That was the case for us. We got the property for slightly below the standard land value. Other inquired properties (before we knew that our friends had one "left over" and before they knew we were looking) were always significantly above the standard land value, except if they were directly from the municipality, but that would only be in the new development areas, where the standard land value is correspondingly higher.

If he wants the property to be counted as equity, it must also have been paid for with equity. Otherwise, the question makes no sense...

All questions make no sense to the one who knows or has already done it (the house construction). When you browse the internet, the statement sticks that a property is equity. However, it is not always mentioned that it must also be owned free of loans. From the further questions of the OP, one could rather conclude that cash funds are not available at all. I find the question and also the answer with the note "financing or not" absolutely necessary.

Nowhere does it say that the property was paid for with equity.

So the property was partially purchased with equity. For the remaining amount, a loan was taken out. The lending bank is not registered in the land register. My concern regarding the equity is much more about the possibility of refinancing this loan and including it in the construction financing. With a registration of the bank (construction financing) in the land register, the bank would have possible security. For an outstanding construction financing, the question remains whether the bank counts the full value of the property as equity or only the part already paid.

Yes, that is quite straightforward if it is clear from the loan agreement that the loan was taken out for the property. Equity is then the purchase price minus the outstanding debt. Paid incidental purchase costs are included by some banks, but not by others.