The property valuation report, essential in the case of requesting financing for the purchase, not only contains the value of the property under analysis or valuation, but also offers much more useful information for the applicant.
When you consider buying or selling a property, the first thing you think about is the price, but you forget an important piece of information, the value. Indeed, value and price are not the same, as Adelaide property valuers said, because one thing is the price that it really has and another is the value that we give it and where emotional, synergy or investment factors influence. To find out that objective value, sustainable over time, that can guide us in the closing price, it is advisable to have an official property valuation that prepares a valuation report.
If you are also going to request financing for the purchase, the criteria and methodologies to carry out the property valuation are regulated under Order ECO/805/2003 , on real estate valuation standards and certain rights for certain financial purposes.
What is the property valuation report?
The property valuation report is the official document by which a professional, expert appraiser, conducts a study of the property to be purchased to find out how much it is valued. For this, it is based on different factors , such as location, orientation, age, building or energy efficiency, among others. Likewise, it studies witness or comparable real estate, that is, those similar to the object of analysis or valuation.
What does the property valuation report include?
Apart from setting an objective amount of the value of the property, it also gathers registry information. In addition, it includes the plan of the property, the urban situation, if tenants reside or the charges that may encumber the property. All these data are important because they can directly influence the appraised value.
This is the required information that must be included in the property valuation report:
- Data of the applicant and the purpose. That is, why you want a property valuation (request a mortgage, invest, liquidate, etc.) and whether or not it complies with the aforementioned Order.
- Identification and location : specification of the asset to be appraised, the location and the state in which it is found (completed, under construction, in project, etc.). Likewise, the registration identification and the reference are included.
- Verification (physical) and documentation of the property, such as state of occupation, surfaces, urban suitability and correspondence with Registry.
- Location and environment: population profile and infrastructures (transport, services, educational centers, shops, etc.).
- Description and area of the land and/or building : if the property has its own plot, the useful and constructed areas of the building, as well as its constructive characteristics (structure, enclosures, roof, carpentry, etc.) The distribution of the property and the facilities that it has, considering its state of conservation, if it is rehabilitated or if it has been reformed, which will increase its value.
- Urban description: it is verified that the characteristics and uses of the property are adapted to urban planning, as well as if it is subject to some type of urban protection.
- Protection, possession and occupation regime: state of occupation, rights and obligations over the property and regulatory limitations that could affect.
- Market analysis: the appraiser carries out a study of similar properties subject to the transaction (witness properties), if they exist. Information is also provided on the possible difference between the market value and the mortgage value and price ranges.
- Information and calculations of the technical values: the valuation method is indicated (comparison, cost or replacement, income update and residual), the criteria used and calculations made to determine the value.
- Property valuation values obtained by the different methods used and the final value of the property valuation, considered according to the purpose of the report.
- Conditions and warnings that could derive from the checks carried out and the available documentation, as well as the indication of the observations that are considered appropriate.
For some purposes, it should not have any type of normative conditioning.
Date of issue, expiration and signatures of the people who sign the document or have participated in the property valuation.
The date of visit to the property is also indicated.
- Annexes and documentation such as photographs, sketches of the property, mandatory documents, licenses…
How an property valuation is done
To carry out a property valuation, it is necessary for the competent professional to carry out five basic checks that are mandatory before signing and making the property valuation report official, some of them will be carried out in person and others after requesting the necessary information from Housing. These five basic checks are as follows:
- Identification and recognition of the property.
- State of occupation and use to which it is intended.
- Public protection regime in the case of housing.
- Urban protection.
- Adaptation to urban regulations.
After these checks, the appraiser visits the property and carries out an inspection of both the interior and exterior. Next, the professional is in charge of the search for real estate witnesses. With all this study, the property valuation report can be prepared, which has to be validated by a property valuation company in order to be used.
What is the work of a property valuation company?
The property valuation company validates the information provided in the document. Check that the data is correct. Likewise, it deepens the analysis with values and prices offered by official sources not only from the current moment, but also from historical data to give a prudent and sustainable final value over time.
How long does it take to issue the property valuation report?
From the time the property is visited until the property valuation report is delivered to the owner, it takes between 48 and 72 hours. However, the use of new technologies, such as drones, blockchain networks with Smart Contracts, will allow in the future to have it almost in real time.
How much does it cost to appraise a home and how long does the report last?
The price paid for a property valuation varies significantly depending on the type of property to be valued, its size and location.
How valid is the report?
In Adelaide, a property valuation is effective for six months from the issuance of the official document.
It is important to remember that, in the case of mortgage transactions, the property valuation is mandatory and it is the only expense that the bank does not assume, which opens the door to hiring this service with an independent firm and being the owner of the property valuation report, which It gives the advantage of being able to negotiate financing with any entity.
If you need a property valuation, do not hesitate to Contact Adelaide Property Valuers. We will advise you without obligation.
