FAQ Private and corporate clients

Which types of real estate are appraised?
All types of domestic and international real estate are appraised, ranging from owner-occupied houses in Mainz to golf courses on Majorca. A special focus of our company is the appraisal of commercial, industrial and specialized real estate (restaurants, leisure and public sector properties) nationwide, for which we can provide extensive references.

Which types of real estate are appraised?
All types of domestic and international real estate are appraised, ranging from owner-occupied houses to golf courses. A special focus of our company is the valuation of commercial, industrial and specialized real estate (restaurants, leisure and public sector properties) nationwide, for which we can provide extensive references.

Where are the properties located?
Our valuations of residential real estate cover the whole of Germany. We appraise commercial and industrial real estate throughout Germany, Europe and internationally. As our main source of information comes from internal and external databases, research from local valuation boards [Gutachterausschüsse], local authorities, state statistics departments and chambers of commerce & industry, we are assured of realistic valuation results.

Who are our clients?
Our clients are mainly banking institutes, insurance companies and official receivers, although we also provide services to accountants, companies, corporate organizations, private individuals and courts.

When is a professional valuation required?
Valuations are mainly required in order to estimate the value of a property, at a date in the present or in the past. The estimated value can assist in the assessment of the sustainability of the value of a real security, or in mediation for the apportionment of capital assets for business or private reasons, or for the purpose of disposing of real estate. A professional valuation can also save time and money, by avoiding protracted disputes or court cases. An appraiser is paid for his impartiality and fees are generally based on a standard fee scale for the industry.

Why instruct a publicly appointed and inaugurated and/or qualified appraiser?
A publicly appointed and inaugurated and/or qualified appraiser has special subject knowledge, which separates his basis of knowledge from that of other appraisers and which must be proven before an audit commission. The training received and long years of career experience and personal integrity are investigated by the commission and continuous professional development is obligatory. Valuations by inaugurated appraisers are held in high regard by the general business world. Furthermore, courts are obliged to instruct only publicly appointed and inaugurated appraisers.

What is a Chartered Surveyor?
Chartered Surveyors are professional members of the Royal Institution of Chartered Surveyors– RICS – (London), which was founded in 1868 and received the Royal Charter in 1881. The institution currently has around 140,000 professional members in over 100 countries and is an internationally respected organization which provides a guarantee of a broad range of services and a high quality of standards throughout the real estate industry.

Qualification is traditionally achieved through a course of study at an accredited educational facility and after successful conclusion of the APC (Assessment of Professional Competence). Only Chartered Surveyors may use the professional qualification MRICS (Professional Member of the Royal Institution of Chartered Surveyors) or – after at least 5 years as a qualified professional member and after being considered suitable – FRICS (Fellow of the Royal Institution of Chartered Surveyors).

Chartered Surveyors must observe and comply with the strictest rules of conduct (‘Code of Ethics’), in order to best serve the interests of the client and the public. Chartered Surveyors have an extensive knowledge of all aspects of tenure, real estate and construction projects. They understand as much about the real estate industry as its laws and regulations and all service areas, as well as the feasibility of construction, acquisition, management and control, valuation and disposal of real estate.

How can the impartiality of the real estate appraiser be guaranteed?
Should an inaugurated real estate appraiser find himself in a conflict of interest or should his impartiality, in some other way, be jeopardized, he must refuse to accept an instruction. If he does not, he risks losing his professional career through the removal of his public appointment and he is held personally responsible for errors in his valuations.

What is the limit of subject-knowledge of a real estate appraiser?
It is not possible for all influencing factors in a valuation to be investigated. This is because a full valuation may not be carried out without the taking of material samples from a property, i.e. without damage, and also because the real estate appraiser has a limited experience of certain issues. This affects his investigation into the presence of contaminating materials and the loading capacity of soils, structural issues of the building, the presence of deleterious material in building fabric, detailed assessment of building damage or the financial assessment of operational fixtures and fittings, such as production plant. In such cases, we may draw on our close cooperation with a network of qualified colleagues who, in individual cases, may be called upon to assist with an instruction.

Official receivers

Which tasks are required in insolvency proceedings?
Real estate appraisals provide information to the official receiver or creditor (generally mortgage provider). It is necessary to establish the value of the Going Concern in order to realize a rescue operation or revitalization.

What is the market value of the Going Concern?
This refers to a conditional market value (according to §194 BauGB) of a Going Concern. Should a business be revitalized or at least retained in its current form, then a valuation must be carried out in respect of the Going Concern. A valuation of this nature assumes considerably higher income and rental factors, significantly lower risks of vacancy and longer remaining useful lifespans. The effect of contamination on value is generally given lesser importance.

What must be considered for the assessment of the breaking up of a business?
The break-up value provides the receiver and/or the creditor information on the effects on value of the closing down of business operations. The Break-Up value is regarded as a so-called conditional market value under the terms of §194 BauGB. In a valuation, particular attention must be paid to alternative uses for the real estate, the retention of value of the site and soil and developments in the regional real estate markets and market segments. In general, it must be ensured that conservative gross potential income factors are set, that the risk of vacancy is considered high and that, in particular, problems with contamination are incorporated into the valuation.

What are the benefits to official receivers from valuations carried out by Ehrenberg | Niemeyer | Adam?
The official receiver and/or creditor banks are provided with valuations which contain the market values of both the Going-Concern and the Break-Up of the concern. Such valuations are based on detailed investigation into local market factors and the development prospects for the real estate. The conclusions of each valuation include comprehensive advice on the various realizable options available.

Can the market value be negative in the case of Break-Up?
It is often possible in a real estate appraisal that, in the event of the continued operation of a business, the real estate will have a positive market value. However, should the operational use of the real estate cease, it is possible that, owing to the location and condition of the property(ies) and the existence of any contaminating materials in the soil or in the fabric of the building(s), the market value may be negative. This is also possible where site values are low and the costs of demolition or for the removal and treatment of contamination are high. In such cases, the real estate is not considered to be marketable in its current form. Strictly speaking in this case, a valuation must provide a negative market value. However, this could cause confusion and is normally provided only in consolidated valuations of real estate portfolios (so-called packet sales).

How much time is required to complete a real estate appraisal?
We have gained sufficient experience from our many years of co-operating with leading German official receivers to be able to work effectively and with a great degree of flexibility. On the assumption that we have been provided with a full set of auditable real estate documentation, we would generally be able to complete a valuation instruction within two to four weeks.

Institutional investors

Can larger portfolios be processed in a shorter time frame?
The time required for the processing of larger portfolios depends on factors such as the number and consistency of the real estate and locations, the quality and extent of the information provided in respect of the portfolio and ultimately the requirements of the client.

Instructions range from individual assessments of fair values for accounting purposes to multiple valuations for the acquisition and disposal of large residential property portfolios or NPLs.

By co-opting our valuation subcontractors, we are also able to professionally, speedily and inexpensively value national portfolios in accordance with E | N | A standards.

Monitoring of the profitability of real estate and updating of market values
The requirements of the financial world for a continual and impartial observation of market and real estate developments and a greater transparency of equity have increased, for example as a result of the introduction of International Accounting Standards (IFRCS), which necessitate annual re-valuations, in conjunction with Basel II.

We work closely with our client, and if required, use tools provided by his accountant, tax advisor or financing institute in order to ensure that costs do not spiral out of control and that these increased requirements are met.

Are the valuation requirements of banks considered?
At the behest of the client, we can incorporate the varying valuation instructions and execution guidelines, as well as any specific report design and format requirements into our appraisals. Essentially, we provide our services in compliance with the provisions of the German Bond Act [Pfandbriefgesetz] and Assessment of Mortgage Lending Value Ordinance [BelWertV).