The Economic Consequences of Homelessness in The US

appointed and sworn expert). However, this formerly very important title has lost a lot of
its importance over the past years, but still is of some value in court procedures. The
title is not generally required for appraisals.
Governing Authorities
Real estate appraisal in Germany is partly codified by law. The federal Baugesetzbuch
(abbr. BauGB, "German statutory code on building and construction'") contains
guidelines on governing authorities, defines the term market value and refers to
continuative rules (chapter 3, articles 192 ff.). Each municipality (city or administrative
district) must form a Gutachterausschuss (appraisal committee), consisting of a
chairman and honorary members. The committee gathers information on all real estate
deals (it is mandatory to send a copy of each notarial purchase contract to the
Gutachterausschuss) and includes it in the Kaufpreissammlung (purchase price
database). Most committees publish an official real estate market report every two
years, in which besides other information on comparables the land value is determined.
The committees also perform appraisals on behalf of public authorities.
Federal Regulations
The BauGB defines the Verkehrswert or Marktwert (market value, both terms with
identical meaning) as follows: "The market value is determined by the price that can be
realized at the date of valuation, in an arm's length transaction, with due regard to the
legal situation and the effective characteristics, the nature and lay of the premises or
any other subject of the valuation" (non-official translation). The intention, as in other
countries, is to include all objective influences and to exclude all influences resulting
from the subjective circumstances of the involved parties.
This federal law is supported by the Wertermittlungsverordnung (abbr. WertV,
"regulation on the determination of value"). The WertV defines the codified valuation
approaches and the general valuation technique. German codified valuation
approaches (other approaches such as DCF or residual approach are also permitted,
but not codified) are the:
Vergleichswertverfahren (sales comparison approach) – used where good
evidence of previous sales is available and for owner-occupied assets, especially
condominiums and single-family houses;
Ertragswertverfahren (German income approach) – standard procedure for
property that produces future cash flows from the letting of the property;
Sachwertverfahren (German cost approach) – used for specialised property
where none of the above approaches applies, e. g. public buildings.
WertV's general regulations are further supported by the Wertermittlungsrichtlinie (abbr.
WertR, "directive on the determination of value"). The WertR provides templates for
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