Real estate appraiser

We explain what a property valuation is, what it is for, how it is regulated, what aspects an appraiser takes into account, etc.

It is important to engage an accredited appraiser when you begin a house sale or purchase transaction. A professional appraiser will perform the process known as "real estate appraisal" to determine the value of the property on the market. Given the importance of this procedure, it is essential that you understand how it works and what elements it focuses on. With this in mind, we offer you a few details about it.

Many banks provide customers applying for a mortgage with an appraisal service for the house they want to buy. However, this service is only a proposal designed to simplify the process for the customer and is optional as the Bank of Spain stipulates that parties who are interested in engaging such a service are free to choose their own real estate appraiser. As you are free to choose who to engage to perform this service, it is essential that you are aware of the regulations surrounding real estate appraisal so that you can appoint a Bank of Spain accredited appraiser to provide the most fair and accurate value for the property.

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Why is it important to determine the value of a property?

When you request a mortgage from a bank, one of the elements they base their offer on is the property appraisal. This is because the bank uses the price of the property calculated from the appraisal to determine the level of financing to offer the customer. Therefore, it is essential to obtain an appraisal for two basic reasons:

Firstly, the bank uses the appraisal to ascertain the actual value of the property on the real estate market. This will enable the bank to cover any debts if the customer defaults on the mortgage in the future.

Secondly, the appraisal is used to determine the maximum financing amount the bank will offer. Generally speaking, this is 80% of the appraised value. This could be problematic for the mortgage applicant as, if the appraisal value is lower than the purchase price, they will have to use their own resources to cover the amount not financed by the bank. However, this situation can also be an advantage for the prospective purchaser, as it can be used to negotiate with the vendor to lower the price to a figure that is closer to the value stipulated by the appraiser.

Below is an example to enable you to better understand how the bank determines the level of financing to offer. Let's suppose that the sales value of the apartment that we want to acquire is €100,000 and its appraised value is €80,000. As discussed above, banks usually finance up to 80% of the appraisal value which, in this case, would be 80% of € 80,000. This means a mortgage of € 64,000 would be offered. Therefore, the party interested in purchasing the property would have to finance the remaining € 36,000 using their own resources.

How does appraisal work?

Several common steps must be followed in order for the appraisal to be approved and considered valid by banks:

The first step is to provide the necessary documents: property deed, registry certification of title and charges and a full description of the property including in rem rights and restrictions on title, a copy of the land registry extract, property plans, building license and the plans approved by the association and relevant local council if the building is under construction, plans for the same for proposed building projects, as well as town planning consultation and cadastre plans for building plots, and a classification certificate or administrative document for public housing properties.

Once these documents have been gathered together, the appraiser will proceed as follows:

  • They will visit and inspect the property. Any appraisal made from a distance, for example through an online appraisal, is non-binding in nature and is merely an estimation.
  • They will analyze the plans of all private and communal areas of the building.
  • They will check that the appraisal is to be performed on the correct registered property and they will include said verification in the appraisal report.
  • They will check survey plans for any irregularities or by-law infractions affecting the property.
  • They will attach proof of six actual appraisals for the same area to the mortgage appraisal document.
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Elements an appraiser takes into account when determining the value of a property

Property appraisals are subject to a regulated and uniform process, irrespective of which appraiser they are performed by. All appraisers inspect the same elements and components of a property in order to determine its value within the real estate market:

  • The condition of the building in which the property is located: whether or not it has been refurbished or passed a technical inspection. The external appearance of the property also influences the final appraisal.
  • The location of the property: elements taken into account include whether the property is located in a city center, and if not, whether it has good public transport links, if it is in a residential or business district and if there are bars, shops and parks nearby, etc.
  • The surface area of the home: how many square meters it includes and the proportion of this area that is inhabitable.
  • The orientation: Appraisals will be higher for properties that receive a lot of natural light. Views are also important when valuing a property.
  • Room distribution also matters, as the size of property is not everything: An essential component of an appraisal is how different areas of a property are distributed and organized. Two apartments of the same size will have different market values if one features a long narrow corridor and the other has wider spaces.
  • Elevator in the building: The value of a property will increase if it is accessible to individuals with reduced mobility.

BBVA Valora and Valora View: your online application

Getting an appraisal is an important step for those wishing to buy or sell a property. For this reason, offers you the BBVA Valora online application which, although intended to only serve as a guide, will prove useful for you to obtain an initial valuation of both the property and the neighborhood in which it is located. It will also help you to compare the property to others in the area and start to do your calculations with respect to a future mortgage.

BBVA offers both customers and non-customers the BBVA Valor View application, which you will find useful during the process of searching for a property. With this, you will see the approximate value of any property just by focusing your cell phone camera on it. Moreover, the map will allow you to see at a glance if an area is within your budget, as well as browse the map to find interesting properties.

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