If you need financing to buy a home, you will know that the appraisal of the property you want to own is a mandatory procedure when applying for a mortgage. Thanks to this assessment, the entity has a reference when it comes to setting the limit regarding the amount of money that it is going to lend us. At the moment, the bank does not finance more than 80% of the appraised value of the property that is used as a habitual residence, a percentage that can go as low as 50%, if it is a second residence.
Likewise, we must remember that the bank cannot impose an appraisal company on us; we can choose it freely, which makes it possible that with the same report we can negotiate with several banks. This does not mean that the entity performs a appraisal on your own.
In any case, when choosing an appraiser, it is essential to check that the valuation company is approved and figure in the Bank of Spain registry. It is a sector that, according to data from the Spanish Association for Value Analysis (AEV), reached a turnover in 2020 of 249.7 million euros in 2020, which represented a decrease of 9% compared to 2019. The same body admits that it went from 1.1 million appraisals in 2019 to 990,000 in 2020 .
These appraisal reports contain some really useful information about your home. For example, allow to check the registration situation of the property, to ensure that there are no embargoes or violations. We are before a document that is an authentic detailed x-ray of the house. In it, it will contain data such as the surface, the state of conservation, the plans, the auction value, etc.
Factors to consider in home appraisal
The professional technician who makes the report takes into account a number of aspects that influence the appraised value. First, location is a decisive factor that can increase or decrease the value of the property, moving in higher numbers the central districts in front of the peripheral ones, although this rule is not always fulfilled due to the age, another one of the keys. Thus, in some central neighborhoods there are residential buildings that have accumulated several decades, while in others on the periphery we can find almost new developments. Related to this point is the state of conservation: properties with better maintenance have more value.
It should be remembered that, as of the entry into force of the new Mortgage Law (Law 5/2019, of March 15, regulating real estate credit contracts), a new distribution was established in the expenses of the mortgage. In this way, The bank is obliged to pay the registration, management and notary expenses, as well as the Tax on Documented Legal Acts (IAJD), the second copies of the deeds and the appraisal expenses corresponding to the mortgaged. If you signed a mortgage before the entry into force of these regulations, you will be interested to know that the Supreme Court ruled last January that the appraisal expenses can be claimed from the bank.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.