senka Bozhilova for Realistimo: The Truth About Property Valuation and Why Value Does Not Equal Price

The Manager of ADVANCE – Ms. Tzenka Bozhilova, was a guest on Realistimo’s real estate podcast, “Real Estate, Realistically.” She shared important and insightful moments related to real estate valuation.

Below is a brief overview of what everyone who is about to obtain a professional valuation should know before going to the bank, the notary, or entering into a property division:

When you need a valuation

A property valuation is not something that is done “only if there is a problem,” nor is it just a number stated casually. It is necessary whenever you need to make a decision with financial or legal significance: in mortgage lending, in divisions and inheritances, in property sales and purchases for greater security, in tax cases, in insurance, as well as in business situations where assets, rights, or entire enterprises must have a substantiated value.

The valuer is neither a buyer nor a seller. They do not defend anyone’s position, but apply methodology and standards established for the profession. This means the value is professionally substantiated — with comparables, calculations, and reasoning — providing an independent framework for judgment and reducing the risk of disputes, especially when multiple parties and emotions are involved.

Value vs. price: the most common confusion

In the podcast discussion, we place special emphasis on the difference between value and price, because this is where people’s expectations most often diverge. Value is a professional opinion derived according to standards and methodology: based on data, comparables, calculations, and justification. Price, on the other hand, is the actual outcome of a transaction and depends on the situation: motivation, timelines, bargaining power, and sometimes pure emotion. Often, if you fall in love with a property, you may pay more, and if you are in a hurry to sell, you may sell for less.

What the valuer actually does and why it takes time

Valuation is a process that begins with collecting documents, continues with an inspection of the property, followed by market and comparable analysis, calculations, justification, and the preparation of a report that must withstand review and audit. In the discussion, we give a specific example: title deeds and technical documentation require more time because every overlooked detail means a missed factor in the value.

This is precisely where automation and artificial intelligence can help — not to replace the valuer, but to accelerate the sorting and interpretation of large volumes of information, so that the professional decision is based on a more complete dataset and is therefore as accurate as possible.

The three approaches behind every good valuation

We also present a fact that is rarely clearly explained to the general public: there are three main valuation approaches, applied depending on the asset and the purpose. The cost approach asks, “How much would it cost to rebuild/replace this property today?”, the income approach asks, “What income can the property generate?”, and the market approach compares it with transactions and comparables of similar properties.

For residential properties, the market approach most often dominates, but for commercial properties, hotels, businesses, and complex assets, the income approach is often leading, because the value there is a function of an operating model and predictable cash flows, not simply square footage and location.

Factors that most often influence residential property value

Location remains a key factor in real estate valuation, but of course it is not the only one. The condition of the property, type of construction, layout, building maintenance, and actual functionality all have a strong impact. The podcast also addresses a topic that will become increasingly important in property valuation: energy efficiency.

In Europe, there are already countries where rental is tied to a minimum energy class, and the banking sector is gradually recognizing the risks and costs associated with less efficient buildings. In our market, certified buildings are still few, the process is difficult and often requires the consent of the condominium association, but the direction is clear: this topic will increasingly enter discussions about financing, costs, and market attractiveness, which in turn will influence the valuations we prepare.

Why furnishing does not affect the valuation as people expect

One of the practical aspects that always surprises buyers and sellers is furnishing. In lending, the bank is interested in the collateral — namely the real estate — not the movable items that could disappear tomorrow. Therefore, the value of furnishings is generally not included in the final market value in the way parties often imagine, and this is where tensions and disagreements frequently arise.

Buyers often purchase fully furnished homes, yet the valuation is lower than they expect. This is because valuation seeks market justification for the property as an asset, not for individual taste or a specific bundle of items.

New vs. old construction

There is also the classic issue of floor area: in new construction, ideal shares are often included, whereas in older buildings the area is presented more clearly and tangibly in terms of room functionality. In practice, the valuer works with documents and official rules regarding areas and appurtenant parts, and additional spaces such as basements and terraces are reflected through coefficients rather than literally.

It is important to understand that the market also “values” these differences — not only on paper, but through how buyers actually prefer, compare, and pay.

How one becomes a valuer and why a certificate is not enough

Here is the professional side of the valuation profession: certification is legally required, but it is not equal to experience. A good valuer is developed through practice, diverse cases, different property types, and repetition, until they begin to recognize risks, “blind spots,” and the details that change the value of any asset.

This is also why banks often prefer valuation companies with internal control systems and second reviews of reports, rather than a single practitioner without a verification process. And when it comes to more complex assets such as malls, hotels, and businesses, time, data, and verification become even more critical, because value there depends heavily on multiple factors — contracts, rental levels, expenses, occupancy, and income sustainability.

Manipulation, false comparables, and why verification is mandatory

The podcast episode also addresses a topic everyone knows but few openly name: when there are multiple participants, there are attempts to distort information. Fake listings, misleading offers, and artificially inflated levels prior to valuation — all of this exists.

Therefore, the valuer must verify, compare, seek real transactions, discuss, validate, rely on their own database, and apply secondary control. Ultimately, the goal is one: the valuation must be defensible and fair to all parties, regardless of who wants what value to be paid.

Valuation provides peace of mind when used on time

If we had to summarize the discussion in one concise sentence, it would be this: valuation brings peace of mind when sought in a timely manner and when properly understood. It is not a tool to “prove a desired price,” but a professional benchmark that protects against rushed decisions, conflicts between heirs, financing disappointments, and costly mistakes in buying and selling. As the sector moves toward stricter frameworks, more standards, and more data, the importance of professional valuation becomes even more visible.

If you are planning a purchase, sale, division, financing, or simply want clarity about the real value of your property, the Advance team is here to assist. We will support you professionally throughout the entire process — from the initial consultation and document review to the preparation of a well-reasoned valuation report in line with the standards and requirements of banks and institutions. Contact us to receive expert opinion, confidence in your decisions, and assurance that your property’s value has been determined objectively and defensibly.