Surely we have heard about the appraisal of a home, but should it always be done? Is it mandatory? When should we appraise a home?
According to Tinsa, the largest independent valuation and digital real estate data management platform in Europe and Latin America, having the official appraisal of a home, carried out by a specialized company, is added value when selling or buying a home.
The bank needs to know the objective value of the property and therefore requests an official appraisal for mortgage purposes, regulated by the official regulations of the Bank of Spainwhich guarantees the value of that property at a certain time.
The importance of a good appraisal is crucial. From the red donpiso They praise that a correct appraisal to combat the effects of inflation and not lose money in the sale process. In this sense, according to the company’s latest report, the correct appraisal of a home accelerates its sale by 40% and increases the closing price of the operation by 10%.
“A correct appraisal is essential, since a flat put up for sale above its market value will not receive interest from the demand.” “The only thing that is achieved by overvaluing an asset is ‘burning’ it in real estate portals. As a consequence, it will end up selling much later and below its value. In addition, and especially due to the inflationary and costly situation we are in, we are doing a disservice to our economy and society by selling homes above their real price”, he affirms. Emiliano Bermúdez, deputy general manager of donpiso.
When is a home appraisal necessary?
The appraisal is necessary whenever we want to know the real and objective price of a property. Some of the most common cases are the following, according to idealista:
- When to ask for a new mortgage.
- When to request a mortgage extension.
- In some cases of novation or subrogation of the mortgage.
- When you want to use a property or property as collateral.
- In case of foreclosure of the house.
How an appraisal is done
It must be carried out by companies approved and supervised by the Bank of Spain and registered in an official registry.
ING advises that the appraiser, who may be an architect or technical architect, first visit the property to measure all the rooms and take photographs. They make a report where those market conditions and parameters are specified.
Factors valued by the appraiser in a home
Location
Indicates the exact location of the house. Because the valuation of a house located on a street in front of a park is different than that attached to a road with a lot of traffic.
Services
It must include the services in the area (schools, parks, medical centers, hospitals, public transport…).
Surface and distribution
ING also recognizes that the useful area of the home, the state of conservation and the reforms that have been carried out are important for appraisal purposes.
Quality of construction materials
It gives greater value and information to mark the price of the house, because the better the quality of the construction, the higher the value of the house.
Location of the property in the building
This is orientation and height. A high floor is valued more than one on the ground floor, just like an exterior floor and with lots of light has a better value than an interior one.
Age of the property
Another fact to highlight, both about the house and the building. If the farm has been rehabilitated, the value of the house increases.
Who pays the appraisal?
As a general rule, the most common thing is that it is the buyer of the house (the mortgage applicant) who pays the appraisal costs.
What happens if the bank does not grant the mortgage?
In the event that the home is appraised to request a mortgage but the bank does not grant it, from the API website, they announce that the original of the appraisal report will be delivered so that it can be used in negotiations with another bank.
That second entity will be required to accept the appraisal as long as it has not expired (that is, it hasn’t been six months since the report was made), so you won’t have to pay for it again. Of course: that the new entity accepts the appraisal does not necessarily mean that it agrees with the indicated value. You may want to check it out for yourself.
