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How to check the real value of a property you are planning to buy

30.04.2025

How to check the real value of a property you are planning to buy

The natural question when buying a property is whether it’s really worth the price being asked on the market. To assess whether the price of the property you’re planning to buy reflects its true value, it’s important to understand the factors that affect its price, as well as the methods used for valuation. To help you avoid the most common pitfalls and make the right decision when purchasing a property, we’ve put together some useful information below.

Property valuation

When it comes to real estate in Montenegro, there are three approaches to assessing the value of real estate and assets, as defined within the International Valuation Standards:
- market approach,
- income (yield) approach,
- cost approach.
According to the Rulebook on the Methodology for Asset Valuation, the authorized appraiser selects the appropriate valuation method based on the purpose, subject, and definition of value, as well as the value assumptions, in order to provide a conclusion on the estimated value of the asset on a specific date, based on their professional judgment and analysis. Read more at the link: https://www.gov.me/dokumenta/442a608f-e96f-4cec-90e5-344eb0d851c3

The three main parameters of property valuation

Real estate prices are influenced by various factors, with location being the most important, followed by square footage, number of floors, and others. You can read more about these factors in our blog. The three main parameters for assessing the value of real estate are:
- Current market value of the property. The market value represents the amount of money for which the real estate can be sold, assuming a free market and a good understanding of market conditions by all participants in the transaction.
- Construction cost of the property - this represents the cost of constructing the building.
- Forced sale value of the property. This represents the market value of the property under conditions of a quick sale, typically applied in situations requiring a sale within a short time frame, such as urgent liquidation or forced sale.

Documentation required for conducting the valuation

In order to carry out a real estate valuation, the appropriate documentation is necessary to ensure an accurate analysis. Therefore, the following documents are required:
- Title deed of immovable property,
- copy of the plan,
- purchase agreement,
- extract from the urban planning document,
- project documentation,
- most recent valuation report,
- financial statements for the past three years (for valuations of properties owned by a company).
For more details, read at the link: https://procjenitelji.me/procjena-vrijednosti-nekretnina/

It is important to emphasize that real estate valuations should be carried out every few years due to frequent changes in market conditions.
Real estate valuation is not a simple process, so it’s important to leave it to the experts. Certified appraisers from Amfora Real Estate will help you determine the true value of your property safely and quickly. Contact us and make a safe investment in a property that is truly worth it!