Real estate valuation is a vast subject. During the courses to access the profession of real estate agent, three short hours are devoted to this theme. Let's be honest, it's far from enough to be able to make a correct estimate.
Another challenge is access to data. The Ministry of Housing compiles statistics that we can use. It is important to know that they are always 6 to 9 months behind the market. In Luxembourg, we do not have access to the actual sales prices of individual properties.
Some use data from real estate portals. However, the listed prices often have nothing to do with the prices registered at the notary deed. You can find properties that are overvalued by 30% and others that are listed close to the market price.
There is no standardised calculation, each agency applies its own recipe. Therefore, by consulting different agents, you will get different results. An estimate always contains an element of subjectivity.
An online simulator can give you a first idea (wrong or good), but nothing replaces the experience of a human who will come to see on site.
So, how do we proceed?
The first criterion is the localization of the property. As a general rule, the closer you get to Luxembourg City, the higher the prices. It is this localization that allows us to deduct a price per are for the land or a price per m² of living space for apartments.
The second criterion is the surface area of the property. Here too, there are significant disparities. It is important to distinguish between the living area (e.g. kitchen, living room,...) and other surfaces (balconies, terraces, cellars, garages,...). The measurement method is important, a standard exists, but it is not always applied.
Finally, the third criterion we consider is the standing / condition of the property. For the same surface area, a new apartment is not worth the same as an unrenovated apartment built in 1990. To estimate this, we consider the renovation work to be undertaken, the energy performance of the property, its year of construction,...
Real estate is a sector that interests many people, everyone has their own opinion on the value of a home.
Here are three tips:
As a homeowner, don't rely on your own perception. The sentimental value of your property will prevent you from having an objective idea.
Friends, neighbors, acquaintances, and others can give you an opinion, but unless they work in real estate, it's just an opinion that might mislead you.
If you have multiple estimates, don't think that the highest is always the best. Too often, I hear "Your colleague gives me 100k€ more." This is called the mandate race. We believe that our job is to sell your property rather than sell you illusions. We prefer to communicate a fair value rather than giving you a too high value that we will have to renegotiate later on.
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