Two different real estate prices exist. The market price and the market value.

The market price is the amount of money a buyer who is ready and approved by a bank is willing to pay for a property, and it’s also what the seller agrees to. It can change over time based on factors like the property’s condition, local supply and demand, and recent sales of similar properties.

Market value is an estimate of what a property could sell for in a competitive market. It considers the property’s features, the overall real estate market, supply and demand, and the prices of similar properties that have sold recently.

The main difference between market value and market price is that market value might be higher in the seller’s opinion than what a buyer is willing to pay or what the property actually sells for.

In Switzerland, the demand for real estate is high, but there aren’t many properties available. This means the market price is higher than the market value. When there’s a big gap between supply and demand, prices tend to go up, as per the law of demand. You’re responsible for covering the difference between the market price and market value; your mortgage won’t cover that.