What is the price and period of validity of a property valuation? How to be sure of the value of your home? Who can guarantee that the market value will be the same tomorrow morning? And what are the values to consider when valuing a house?
We can’t make do with a rough idea of the price, details, and potential of our homes. In the real estate sector’s golden age, property prices were inflated like balloons. Although it’s clear that no one can be sure of the price of a house (only an official valuation for a fixed duration), we can now sleep soundly because it seems that tomorrow the balloon will be just as large as it was yesterday.
What distinguishes a valuation from other types of appraisals  is its purpose. A property (home, commercial premises, building, estate) should be officially valued in the following situations:
A valuation can be requested by a proprietor or possible buyer, the bank which will provide the loan, the tax authorities, a judge or a notary public.
A property must be officially valued by a valuation company approved by the Bank of Spain. These are the only valid businesses, as they are regulated and supervised in order to provide transparency. The department of control signs off the valuation report. Valuation companies are businesses formed by technical valuators, namely architects, architectural technicians, industrial engineers, or agricultural engineers.
Now we have somewhat clarified the “why?”, there are other values to be considered in a valuation. Values that can move up or down, cause and effect, “the balloon might be deflated by the morning” …
Valuation companies are free to establish their own prices depending on the size of the property. In the case of a “normal” home, the rate could vary between 100 and 500 euros.
A valuation expires after 6 months, making it very important to order one at the time when we are going to need it.
There are always two areas of focus on a valuation: general and specific.
The general focus
|What are we valuing?||
|Are there any limitations of restrictions of use?||
|What is the extent of the property’s ownership?||
|What is the state of the property’s occupancy?||
It must be known if the property to be valued is occupied by the owner, or by another person or other legal entity, and in this case, under what terms.
The specific focus
|Characteristics of the environment||
|Characteristics of the building in which the property is located||
Age and general conservation, accessibility and condition of entrances, private garden areas, swimming pool, concierge, security, specialised communal rooms or other services, visible construction issues…
|Characteristics of the building that are valued||
Area, number of rooms, bathrooms or toilets, location within the building, attached annexes, preservation of the various elements, orientation, brightness, energy efficiency, quality of finishes, appliances…).
|Characteristics of the market segment||
In which the property is found (supply and demand for similar houses, prices…).
All those golden years before the crisis, played too much at inflating and deflating the balloon, a practice that brought about the result of inflated valuations to increase profits at the time of the operation.
But how is the market today? Thanks to the errors committed in the past, this practice has been eradicated within the sector and now the simile of “the balloon” no longer exists; the sector changed and took various measures with respect to guaranteeing the independence of the valuation companies and thereby assuring a price “without air”.
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