A property valuation or appraisal is the process of calculating the current market value of a property (which may be home, an estate, a business establishment, a building, etc.).
Who is authorised to carry out a home valuation?
Home valuations must be carried out by an appraiser authorised by Banco de España (central bank of Spain). The appraisal value and the documents issued by the appraiser are essential when looking to purchase a home, since this value is one of the most important variables determining the amount we can borrow from the bank.
What is a home appraisal used for?
A home appraisal is needed for the following reasons:
- Knowing the current market value of the property: The bank must know the property's real value on the market so as to ensure that it will be able to pay off the debt in the event of non-payment.
- Establishing the amount that can be borrowed: the appraisal is used to determine the amount the bank can finance, which is usually around 80% of the appraisal value of the property.
How much does a home appraisal cost?
The cost of a home appraisal is complex because there is no regulation regarding the purchase and sale price. These costs can vary, depending on a number of factors:
- If the appraiser needs to gather additional information, such as building plans or notes from the registries, the cost will increase.
- The location of the home also influences the appraisal cost. After all, appraising a flat in a small town in Cáceres does not cost the same as appraising a property in the heart of Barcelona.
For the appraisal to proceed, we must provide the appraiser with a set of documents:
- The plans or drawings of the property.
- The instrument of ownership.
- In case of land with building rights, we must also have the cadastral plan and the certificate or written urban zoning consultation. In the case of a building under construction, we will need the building licence and the construction drawings duly approved by the corresponding trade association and local council.
- If we do not have the necessary documents, the appraiser will need to obtain it, which may push up the appraisal price.
What is taken into account when conducting a home appraisal?
There are many factors to take into account when carrying out the appraisal, notably: the general condition of the building, whether or not there is an elevator, the location, the condition of nearby homes, transportation links, local schools, the internal layout of the property, the floor area, the quality of the materials used, the direction the property faces, whether the documents are in order...