Who pays the rating

Market value, market value or sales price?

(rh) The market value of a property is the value that the property appraiser or the hedonic valuation has determined. It depends on many factors, for example the location, the expansion and the floor plan, and is based on the market value of comparable houses or apartments in the municipality or region in recent years.

The purchase price or selling price is the price that the seller and buyer have agreed on. It can be below or above the market value of the property, especially for special properties or collector's items. One prospect may be willing to pay a premium because of the stucco ceiling in the living room, while another may ask for a discount because they find it cheesy. Interested parties are also willing to pay a higher price if the demand is high - or try to push the price down if the supply is high.

The importance of funding

The basis for the financing is the market value of the property. When you take out a mortgage, your bank usually gives you up to 80 percent of the market value. If the market value and the purchase price differ, the banks apply the lowest value principle. If you've got a bargain and the purchase price is below the market value, your bank will lend you up to 80 percent of the purchase price. That doesn't matter for the financing. However, if you have paid more than the market value, you will only receive up to 80 percent of the lower market value and have to raise more equity. To be precise, the difference between the market value and the purchase price. The lowest value principle applies to the financing of property purchases and changes of hands and was introduced by the Swiss Bankers Association to minimize the risk of a property bubble.