Is it worth buying a property that is undervalued?

Sellers always want to sell at the highest possible price; buyers, quite the opposite. Savings, however, do not always come cheap. It is worth knowing this when setting out to buy a property.

What affects the low value of a property?

Many factors affect the value of a property, as we have written many times on our blog, though usually in the context of the factors that raise it. For many reasons buyers often look for places where properties are cheaper. Where should you look for such properties?

A low value is influenced above all by the area (which can account for as much as 30% of the value). A bad reputation of an area among the city's residents, frequent police interventions: this may not bother many potential buyers and may result in a relatively low property value in the area. A lower price can also be caused by nearby building work, poor public transport or, on the contrary, tram lines right under the property's windows. The technical condition of the building and any mortgage encumbrances also clearly affect the price.

When a property is undervalued

Sometimes, however, the price of a property is exceptionally low and its amount differs greatly from the prices of buildings in the area.

Bargain prices can arise for many reasons, but most often the seller needs quick cash. The matter is urgent enough that, without heeding market trends, they significantly lower the price. Unfortunately, it is also a common practice to understate the amount in the notarial deed (akt notarialny) (in order to pay the lowest possible tax and notary fees) and to pay the seller the missing sum on top. What might the consequences be?

The sale of a property is subject to a 2% civil law transactions tax (PCC). This fixed rate can become a problem when the tax office suggests that the property's value is not the market value and is lower than it by at least 33%.

When the tax office analyses the notarial deeds and finds irregularities in them, it calls for the declared value to be raised within 2 weeks of the call being delivered. The call will state the property value suggested by the office. The best course then is to agree with the office and pay the difference (together with interest!). If, however, we still do not respond positively to the call, the tax authority appoints a property valuer. If the valuer's valuation is 33% higher than the price stated by the parties, the buyer will be obliged to bear not only the cost of the expert's opinion but also of any court proceedings.

When buying a property, it is worth using the services of a professional estate agency, which knows the market realities well and will not propose a risky transaction to us. Mistakes can be expensive.