If you are thinking of selling or buying a home, one of the aspects to take into account is the issue of appraisal. In this article we are going to explain what it is, what it is for and who should do it.
In the real estate world, an appraisal is a professional evaluation that determines the real value of a property that is carried out with the objective of establishing an objective price and according to the market at a certain time. The appraisal consists of carrying out a series of checks and relative analyzes to correctly evaluate the value of the property.
Types of appraisals
Real estate appraisals or valuation, carried out by a real estate agency, is what determines the “real” value of a home with a series of checks related to the property.
Here are some of the checks that are typically performed:
- Inspection of the property in person to assess its condition
- Real estate market analysis
- Analysis of supply and demand in the area
- Evaluation of more specific characteristics of the home
- Consideration of external factors that may affect the value of the home
The bank appraisal is carried out when a mortgage loan is requested by a financial entity whose main purpose is to determine the value of the property that will serve as collateral for the loan.
Their work will consist, once you request the loan, to visit the property and carry out a series of exhaustive evaluations to estimate the value of the property. With this, the bank will make the decision on the approval of the mortgage loan and will determine the maximum amount of the loan that will be granted based on the value of the property.
The appraisal value may not be equal to the market price, but it must be taken as an appraisal of the value of the property in the assumption of normal market development.
The bank that grants the loan, in this way ensures that the home can serve as collateral in case of non-payment to recover the amount borrowed.
The loan applicant protects his interests in this way, since he will thus determine the auction value in the event of a possible foreclosure.
Finally, the interest of the investor who acquires the mortgage title issued by the bank.
This process already involves an independent professional appraiser hired by the bank. These professionals belong to appraisal companies approved and supervised by the Bank of Spain.
Documents needed for an appraisal
To appraise a home, the following documents must be provided:
- Cadastral Documentation: Physical, legal and economic data of the house that appear in the Cadastre.
- Registry certification, updated simple note or deed.
- In the case of a rented home: photocopy of the lease, the latest rental receipts, payment and expense status.
- In case of being a VPO (Official Protected Housing): a photocopy of the definitive qualification certificate will be necessary, that is, the document issued by each autonomous community in relation to a housing, development, by which its Public Protection is declared and its legal regime is established
Valuation of properties under construction
In these cases, the documentation to order an appraisal report varies with respect to finished properties. In these cases, the appraisal company will require:
- Cadastral Documentation: Physical, legal and economic data of the property under construction that appear in the Cadastre
- Photocopy of work license or application for the same
- Project endorsed: This is the verification made by the College of Architects on the formal correction of all working documents.
- Work execution contract
- Real budget of the works contract
- Final quality report
- Last certification of work issued by the facultative direction
If you want to make an appraisal of your property, contact us and we will make a free valuation of your property.