date 03.01.2025
Features of real estate valuation for banks and investors.

Features of real estate valuation for banks and investors.

Learn how real estate valuation is conducted in Spain, its types, key aspects, and the laws regulating this field.

The most up-to-date information is with our specialist!

Real Estate Valuation for Banks and Investors: Process Features

When purchasing property in Spain, taking out a mortgage loan, or insuring a home, one of the key steps is property valuation. In Spain, there are specialists who carry out this task: property appraisers, divided into two main groups: tasadores (government-authorized) and certified appraisers. In this article, we will take a detailed look at how property valuation is conducted for banks and investors, as well as the factors that influence its value.

What is Property Valuation and Why is it Important?

Property valuation is the process of determining the market value of a property. It is required in various situations: when buying and selling real estate, when applying for a mortgage loan, and also for property evaluation in cases of inheritance or for tax purposes. Valuation is especially important for banks when they issue mortgage loans, as it confirms that the value of the property is adequate to secure the loan.

Who are Tasadores and Certified Appraisers?

In Spain, there are two types of specialists who conduct property valuation: tasadores and certified appraisers. Tasadores are government-authorized professionals, who are allowed to perform valuations for mortgage loans, insurance companies, and banks. They work under strict regulations and use standardized reports.

Certified appraisers, on the other hand, can not only carry out valuations but also provide consultancy on the market value of properties, which makes them more flexible in their work. Their activity is regulated by the Royal Institute of Chartered Surveyors (RICS).

The Property Valuation Process

The property valuation process includes several stages. The appraiser examines the physical condition of the property, its location, size, and other important parameters. They perform an on-site inspection, taking into account the quality of finishes, the presence of renovations, and surrounding infrastructure. Afterward, the market value of the property is assessed based on the current market conditions and comparable properties in the area.

Factors Influencing Property Value

The value of a property can be influenced by numerous factors, including:

  • Location — accessibility to public transport, proximity to the city center, proximity to schools and hospitals.
  • Building condition — age, presence of an elevator, condition of the façade and general condition of the building.
  • Property features — size, presence of balconies, terraces, or garages.
  • Economic situation and state of the real estate market in the region.

Property Valuation for Mortgage Loans

When a buyer decides to take out a mortgage loan, the bank always requires a property valuation. In this case, the valuation is necessary to ensure that the property value covers the loan amount. In Spain, this valuation must be carried out by authorized companies that are registered with the Bank of Spain.

Types of Property Valuation

Depending on the purpose, there are several types of property valuations:

  • Market value assessment — used to determine the fair price in a purchase or sale.
  • Valuation for mortgage loans — required for obtaining a loan to purchase real estate.
  • Tax valuation — used to calculate the tax obligations of the property owner.
  • Investment valuation — helps determine the potential return on investment in real estate.

Conclusion

Property valuation is not just a formality but an essential process that ensures all parties in a real estate transaction are confident in the real value of the property. Whether it is purchasing a home with a mortgage loan, evaluating property for tax purposes, or assisting investors, professional valuation helps make informed decisions and avoid risks. For a more accurate valuation, it is always important to consult certified specialists or authorized appraisers who have the necessary knowledge and experience.

If you need a property valuation for a mortgage loan or for investing in Spain, it is important to understand the key steps and requirements that will help you successfully complete this process.

Subscribe to our article newsletter!

Services

Popular services

Services

Popular articles