Clarification of terms first: The Red Book and Blue Book come from two different organizations. The Red Book is the standard reference work of the British RICS (Royal Institution of Chartered Surveyors) with global application. The Blue Book are the European Valuation Standards (EVS) the TEGoVA (The European Group of Valuers' Associations), the European umbrella association of valuer associations.

The Red Book: RICS Valuation – Global Standards

The Red Book – officially RICS Valuation – Global Standards – has been published since 1976 by the Royal Institution of Chartered Surveyors and is regarded internationally as one of the strictest sets of rules for real estate valuation. The current edition was published in December 2024 and has been in effect since 31 January 2025 binding. It fully integrates the International Valuation Standards (IVS) of the IVSC and supplements them with mandatory professional and procedural standards.

The structure follows a clear hierarchy: The Professional Standards (PS 1 and PS 2) mandates compliance, ethics, competence, objectivity and disclosure obligations. The Valuation Technical and Performance Standards (VPS 1 to VPS 6) standardize the valuation process itself – from the engagement agreement through bases of value, valuation approaches and property inspection to the valuation report. The Valuation Practice Guidance Applications (VPGA) provide supplementary, advisory guidance for individual valuation occasions, such as valuation for financial reporting under IFRS 13.

The 2025 edition introduces three innovations of particular practical relevance:

  • ESG becomes mandatory: For the first time, valuers must systematically record sustainability features and assess their impact on value – no longer merely as a recommendation, but as a standard.
  • Valuation models as a standalone standard: The new VPS 5 addresses the handling of valuation models, including cash flow models and automated procedures.
  • AI and AVMs under governance: The use of artificial intelligence and automated valuation models is permitted, but requires human oversight and documented professional judgment.

A Red Book appraisal report may only be prepared by someone registered as RICS Registered Valuer is registered – typically members holding the designation MRICS or FRICS. Compliance is monitored through the RICS Valuer Registration Scheme, which gives the Red Book its high level of acceptance among international investors, auditors and fund management companies.

The Blue Book: European Valuation Standards by TEGoVA

The Blue Book – the European Valuation Standards (EVS) – is published by TEGoVA, which represents around 70,000 valuers in nearly all EU member states. The current 10th edition, EVS 2025, has been in effect since 1 January 2025. In Germany, HypZert and other professional valuer associations, among others, are members of TEGoVA; they award the European qualifications REV (Recognised European Valuer) and TRV (TEGoVA Residential Valuer).

The decisive characteristic of the EVS is its close integration with the EU law. While the Red Book is conceived on a global scale, the EVS translate European legislation directly into valuation practice. Two developments characterize the 2025 edition:

  • Banking regulation: The revised Capital Requirements Regulation (CRR III) introduces, alongside Market Value, a "property value" on the basis of "prudent and conservative valuation criteria". Price increase expectations are not taken into account, and if the market value is significantly above the long-term sustainable value, an adjustment must be made. Guidance Note EVGN 2 on mortgage lending value determination addresses this interplay in detail – familiar territory for German valuers, since the concept is recognisably related to the mortgage lending value under the BelWertV.
  • Green Deal: The revised standard EVS 6 on energy efficiency provides, for the first time, a concrete methodology for how legally mandated renovation obligations – for instance for the energetically worst-performing existing buildings – are incorporated into market value determination via a residual approach. In doing so, the EVS go beyond merely documenting EU energy law and make it operable for valuation purposes.

Market Value and Verkehrswert: closer together than often assumed

Both international standards operate with the Market Value as the central basis of value: the estimated amount for which a property should exchange on the valuation date between a willing seller and a willing buyer in an arm's length transaction after proper marketing, wherein the parties had each acted knowledgeably, prudently, and without compulsion.

The German Market value pursuant to § 194 BauGB (German Building Code) is largely congruent in substance: it, too, is based on the price that would be achievable in ordinary business transactions given the legal circumstances and actual characteristics of the property, without regard to unusual or personal circumstances. In technical literature and valuation practice, Verkehrswert and Market Value are therefore regularly treated as equivalent.

The differences lie less in the definition of value than in the The path there:

  • The ImmoWertV defines the procedures – sales comparison approach, income approach and cost approach – in detail and as binding requirements, including the necessary data from the expert committee (Gutachterausschuss) (standard land values, capitalisation interest rates, cost approach factors).
  • Red Book and EVS work together with valuation approaches (Market Approach, Income Approach, Cost Approach) and give the valuer greater methodological freedom – for example when using DCF methods, which are standard internationally but not provided for as a distinct standardised procedure under the ImmoWertV.
  • The international standards govern Process and professional duties significantly more detailed: engagement agreement, independence, conflicts of interest, report content, and quality assurance are standalone standard subjects.

When which standard applies

In practice, the valuation occasion regarding the applicable framework:

  • National occasions – ImmoWertV (German Real Estate Valuation Ordinance): Court appraisal reports, proof of the lower fair market value under § 198 BewG (German Valuation Act) vis-à-vis the tax office, disputes in inheritance and divorce cases, and valuations by the expert committee (Gutachterausschuss) must strictly follow the German regulatory framework. A Red Book appraisal report cannot replace a market value appraisal under ImmoWertV in this context.
  • International financial reporting and institutional investors – Red Book / IVS: For fair value determination under IFRS 13, in cross-border transactions and portfolio valuations for international funds, clients and auditors regularly expect Red Book conformity. Compatibility with international standards is also frequently part of the requirements of institutional investors when valuing German special AIFs – alongside the requirements of the KAGB (German Investment Code).
  • Loan collateral and banking supervision – BelWertV within the European framework of the EVS: In Germany, the determination of mortgage lending value follows the BelWertV. With the new "property value" under CRR III, a Europe-wide supervisory framework is emerging, which the EVS 2025 fill out methodologically. Anyone valuing for credit institutions will directly experience the convergence of both worlds in the coming years.

Practical note: The standards are not mutually exclusive. A methodologically sound market value appraisal under ImmoWertV can be structured so that it simultaneously meets the reporting and process requirements of the Red Book or the EVS – with an appropriate declaration of conformity. For international clients with German property portfolios, this is regularly the most economical solution: an appraisal report that holds up before German authorities and courts just as well as before auditors and investment committees.

Conclusion

The Red Book and Blue Book are not competitors to the ImmoWertV, but rather its international complement. The RICS Red Book sets the global benchmark for professional obligations, process quality, and valuation for international financial reporting. TEGoVA's EVS translate European law – from banking regulation to the Green Deal – into concrete valuation methodology. Both sets of standards were fundamentally modernized in 2025 and place ESG, energy efficiency, and the handling of valuation models at their core.

For owners, banks and institutional investors, this means: choosing the right standard is not a mere formality, but determines the usability of the appraisal report. A firm of valuers proficient in both worlds – standardized German market value determination as well as the requirements of international standards – delivers valuations that hold up in any context of use.

The real estate valuation firm STRECKEL prepares market value appraisals in accordance with the ImmoWertV, achieving the process and reporting quality of international standards – based on 20 years of experience in real estate valuation for institutional clients.