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When it comes to valuing a property for a sale, inheritance, or any other reason, various doubts arise about the process, whether what we need is a valuation or an appraisal, and what type of contract is convenient for us based on the documentation required. We answer all these questions and more in this article.
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How to calculate the value of a home
To divide an inheritance, apply for a mortgage, or distribute assets, it is necessary to calculate the value of a home. Given this, several questions may arise: How is this value calculated? Who performs this valuation? What factors are taken into account when performing it? We answer these questions and all the doubts that may arise below.
Differences between valuation and appraisal
Often, when determining the value of a property, the question arises whether to request a valuation or an appraisal, and what is the difference between the two.
When we talk about Valuation, we are talking about a document that offers, in an orientative way, an estimate of the value of the property. It can be done online, so a visit to the property is not necessary. And most importantly: since it is not regulated or approved by any entity, it has no legal value, so it cannot be presented when applying for a mortgage.
As for the Appraisal, we are referring to an official report, which complies with the regulations and has legal value, issued by an appraisal company, through an approved appraiser, usually to apply for a mortgage.
How a property is appraised
When calculating the value of a home, the appraiser takes into account a series of internal and external factors that determine its market price. These are:
- The Surface area of the property, that is, the square meters and layout of the space in the property.
- The Location of the property. Its physical location and the main services nearby. Proximity to public transport, health center, parks, schools, etc.
- The Age of the property. How many years it has and how it is preserved, if it has renovations or if it needs them.
- And, finally, if it has any additions, such as garage or storage room, or terraces and if it has an elevator or only stairs.
What is a mortgage appraisal
When we decide to buy a property and get the financing to take care of the costs, the bank needs to know the price of said property, so it requests an appraisal to assess the price and risks that it would assume when granting the mortgage loan.
A mortgage appraisal is a report carried out by an expert professional in the field which determines the current market value of a home. The price estimated by the appraiser will be considered as a guarantee of the mortgage that has been requested. Normally, financial institutions grant up to 80% of the total value of the property, a value that will have been stipulated by the relevant appraiser in the mortgage appraisal.
What is advisable to request for a separation of property?
While an Official Approved Appraisal is perfectly valid when dealing with a separation of property, not everything it offers is necessary and you can, instead, save costs by requesting a Real Estate Valuation for Advice (VIA), since a VIA does not require the formalities of an Appraisal.
And, what is a VIA? It is a valuation oriented to the knowledge of value, elaborated by a technician of Euroval. These valuations can be carried out in properties such as homes, premises, offices, warehouses, buildings or land. Once the payment has been made and during the following 24 -working- hours, contact is made to arrange the visit to the property, if necessary.
And for an inheritance?
As with a separation, in an inheritance it is also advisable to request a VIA instead of a Mortgage Appraisal, since it is valid for this and you can save the costs and formalities involved in an Official Approved Appraisal.
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