Afik HanahalHow to know what your property is worth — valuation methods
In short: Residential value is set mainly by comparison: deals actually closed on similar properties nearby, adjusted for the property's features — size, floor, condition, parking, balcony, orientation and additions. Land is valued differently: by designation, building rights and future planning. A proper valuation compares to deals, not listings, and significant transactions use a licensed appraiser.
Three valuation methods
- Comparison — to similar closed deals (the main approach for apartments and houses).
- Income capitalisation — for income property: annual rent divided by the customary yield.
- Cost / residual value — for land and projects: finished value minus all costs and developer's profit.
What raises and lowers an apartment's price
| Raises | Lowers |
|---|---|
| High floor with lift, view | Ground floor without garden, high floor without lift |
| Registered parking, storage, sun balcony | No parking, enclosed balcony without permit |
| New or renovated building, approved TAMA | Old building without a plan, committee debts |
| Good layout and orientation | Unpermitted additions, deviations |
| Near park, schools, railway | Main road, noise |
Where to check real deals
The Tax Authority's real estate transactions database shows actually reported deal prices by address and period. That is the source — not portal listing prices, which reflect expectations, not results. Compare to deals from recent months and truly similar properties.
Why land is a different story
Land has no "apartment area" to compare. Value follows what may be built (zoning plan, rights), what is expected (master plans), ownership structure, and taxes and levies on the way to realisation. Two adjacent parcels can differ tenfold. What to check before buying land.
When you need a licensed appraiser
- Large or complex deals, especially land.
- Disputes between heirs or partners.
- Mortgage (the bank requires an appraisal).
- Betterment levy, capital gains and legal proceedings.
Frequently asked questions
How do I know what my house is worth?
Compare to deals actually closed on similar houses in the neighbourhood (Tax Authority database), adjusting for house and plot size, condition, remaining building rights, permits and additions. For houses, remaining building rights are a central value component.
Is a broker's valuation the same as an appraisal?
No. A broker gives a market estimate for pricing and marketing; a licensed appraiser gives a binding professional opinion for legal, financing and tax purposes. For most sales a market estimate is enough; for complex deals — an appraiser.
What is the difference between asking price and deal price?
The asking price is the seller's expectation in the listing; the deal price is what was actually paid and reported to the Tax Authority. The gap can be significant, which is why pricing follows deals.
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