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Financial Dictionary - Appraisal


Appraisal involves assigning a value to an object through a document prepared by an expert, establishing the value of the asset based on specific characteristics and a range of applicable variables.

The criteria and methodology for performing appraisals are subject to regulations. These regulations also establish which professionals are qualified to perform them.

What types of appraisals are there?

The most common appraisals are:

  • Appraisal of flats.
  • Appraisal of houses.
  • Appraisal of properties.
  • Judicial appraisals.
  • Appraisal of motor vehicles: cars, motorbikes, etc.

Real estate appraisal:

Appraisal is related to the world of real estate: flats, houses, commercial premises, farms, etc. Appraisal reports define a market price for the appraised property at the time, based on supply and demand.

Some of the most important variables in appraisals include the size, condition and surroundings of the property. Some professionals are qualified to perform appraisals, but there are now technological and computer applications that can also do so.

The appraisal is a core document in mortgage applications. Mortgage appraisals must be issued by an approved appraisal consultancy or manager. They must be signed by a competent professional to have legal effect. To ensure the report is as objective as possible, the appraisal company is currently appointed by an agency external to the bank.

Judicial appraisals

Judicial appraisals are usually required when an incident occurs and damaged property or assets need to be valued. The report assesses the amount to be claimed from the insurance company or the party responsible for the incident.

Vehicle appraisals

Vehicle appraisals are usually performed after an accident or when it is decided to sell a vehicle.

What do real estate appraisals consider?

The appraisal report considers the following:

  • The location of the property, through the cadastral registry.
  • Its surface area in square metres, layout, number of bedrooms and bathrooms, construction quality, visible facilities, refurbishment, whether the property is exterior or interior, whether it has a lift, etc.
  • Local surroundings and services, such as supermarkets, parks, sports centres, schools and other useful services.
  • State of upkeep.
  • Use of the property: rental, tourist use, etc.
  • Protected status if the property is public housing.


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