Property valuations: the facts

Getting your property valued is one of those unavoidable tasks that every home owner faces at some point. The purpose of valuation is to ascertain how much a property can realistically sell for on the open market. This is a vital process that may be undertaken for a number of reasons, but must always be entrusted to a qualified professional.

In Spain, valuations are regulated by the Bank of Spain. This means that both the seller and the prospective buyer end up with a specific, objective estimate arrived at through a legally determined process. Lending institutions also have an interest here, since the valuation will determine the size of the mortgage made available to the buyer.

Why get a valuation?

A recent valuation provides essential information when buying or selling a home. The buyer can verify the property’s real value, the seller will have a benchmark for setting a price and the bank will receive an official assessment for mortgage calculation purposes.

As a general rule, banks will not grant a mortgage for more than 80% of the valuation figure. Otherwise, they would be left with little collateral for the loan. For buyers, a valuation will reveal whether the seller has priced the property fairly or is trying to inflate its value.

A valuation is an important part of your due diligence as a purchaser, as it will reassure you that the property is in good condition. For example, if a home looks great but the valuation is lower than expected, that probably means it needs a lot of work.

Essentially, an up-to-date valuation is the best way to ensure the optimum outcome for all parties.

When should the valuation be done?

Now that you understand what a valuation involves and why it matters, you might be wondering about the best time to get it done.

Obviously, a valuation must be carried out before any sale and purchase agreement is signed. The earlier this happens, the more smoothly the negotiations will go, and if you are the buyer, you will know roughly how much to ask for from your mortgage lender.

However, a valuation can also be very useful if a property is being divided, or in the event of an inheritance or divorce. In all of these situations, it’s important to have a clear idea of the property’s current value.

Finally, some valuations are for informational purposes only, so the owner knows how much the property is worth.

How does it all work?

Residential valuations are performed by specialist companies and regulated by the Bank of Spain. It is up to the property owner to get in touch and request a professional valuation. The valuer may be an architect or an architectural technician, but will always be officially accredited to do the job.

The valuer will visit the property to carry out an inspection and will take account of a number of external factors as well as the qualities of the property itself. These may result in a higher or lower valuation. Some of these factors include:

• Property location. Properties in sought-after locations within easy reach of shops, play areas and schools tend to command higher prices.
• Market conditions. The valuation may be affected by the current market climate.

During the inspection, the valuer will weigh up all of the property’s various features. Among other things, he or she will check that all of the building services are in good working order and consider the layout, the number of bedrooms and bathrooms, the overall state of repair, the condition of any shared spaces, the community services available and the property’s energy performance.

How much does a property valuation cost?

The cost of a property valuation will vary depending on a range of factors, and there is no official fixed fee. You will be charged differently for a mortgage lending valuation than a purely informational one.

Other factors that can affect the price of a valuation include location, the size and characteristics of the property, the information you require, and so on. As a very rough guide, you can expect to pay between €100 and €450 at current market rates.

In summary, obtaining a property valuation is an essential step when buying or selling a home. It must be carried out by a qualified, officially accredited professional and the cost will depend on the circumstances and a range of other factors.