How is a property appraisal carried out in Spain?

If you are thinking about buying, selling, or applying for a mortgage in Spain, you have probably come across the term "property appraisal". But did you know that a property appraisal is an essential process to determine the real value of a home? In this blog, GR Estates explains how a property appraisal is carried out in Spain, what factors influence the value of a property, and why it is crucial for both buyers and sellers.

What is a property appraisal?

A property appraisal is the process by which a certified professional (appraiser) determines the value of a property at a specific moment in time. This value does not always match the sale price, as it is based on a range of objective factors such as the condition of the property, its location, size, features, and the local real estate market.

A property appraisal is essential for various situations, such as buying a home, applying for a mortgage, selling a property, or distributing an inheritance.

The importance of carrying out a property appraisal

Carrying out a property appraisal is crucial for several reasons:

1. Defining the real value of the property: The appraisal helps determine the exact value of a property, which is essential to avoid overpaying when buying a home or selling it for less than its true value.

2. Obtaining financing: Banks usually require an official appraisal before granting a mortgage. The appraisal ensures that the loan requested does not exceed the actual value of the property.

3. Avoiding legal surprises: In legal situations, such as inheritance disputes or property divisions, the appraisal is key to determining the value of a property.

How is a property appraisal carried out in Spain?

A property appraisal in Spain is carried out through a standardised process that follows specific guidelines to ensure objectivity and accuracy in the estimated value. Here we explain how this process is carried out.

1. Selection of a certified appraiser

The first step in carrying out a property appraisal is to hire a qualified appraiser recognised by official entities, such as the College of Property Registrars or the Society of Appraisers. These professionals are trained to assess properties according to the criteria established by Spanish regulations. The appraiser must also be registered with an accredited company that is a member of the Spanish Association of Real Estate Analysis and Valuation (AEVI), ensuring the reliability of the process.

2. Property inspection

The appraiser carries out a physical inspection of the property. During this visit, various aspects of the property are evaluated, such as:

• Location: The area in which the property is located is one of the key factors influencing its value. Properties located in areas with good infrastructure, nearby services, and access to public transport tend to have a higher value, such as those in the Costa del Sol.

• Condition: The appraiser reviews the general condition of the home, both exterior and interior, to assess whether it requires renovation or is in good condition. The state of conservation directly impacts the property's value.

• Size and layout: The total built area of the property is measured, and the layout of the spaces is reviewed. More usable square metres and better distribution increase the property's value.

• Additional features: Pools, gardens, terraces, views, or garages are factors that also increase the value of the property.

3. Analysis of documentation

In addition to the physical inspection, the appraiser reviews the legal documentation of the property, such as the deed, the property registry, the energy efficiency certificate, and other documents that may influence the value of the property. In some cases, it is necessary to check that there are no outstanding charges or debts on the property that could affect its appraisal.

4. Comparative market analysis

One of the most important parts of the property appraisal is the analysis of comparable properties in the same area. The appraiser investigates the sale prices of similar properties nearby (price per square metre, age, features) to adjust the value of the appraised property.

This process is fundamental because the real estate market varies according to location and surrounding conditions, so appraisals are adjusted to local supply and demand.

5. Issuing the appraisal report

Once all inspections and analyses are completed, the appraiser prepares an appraisal report, which includes:

• A detailed description of the property.
• The estimated value of the property according to technical criteria and market analysis.
• Factors that influenced the valuation.
• Recommendations if the property has any issues that may affect its value (e.g., structural deficiencies or legal problems).

This report is crucial for banks, as it serves as the basis for granting mortgages, as well as for other legal and fiscal procedures.

Factors affecting the appraisal of a property

There are several factors that impact the value of a property in Spain:

• Location: As mentioned, location is one of the most important aspects. Properties situated in areas with good connectivity, nearby services, and high housing demand tend to have a higher value.

• Condition of the property: The overall condition of the home, any potential renovations needed, or special features, such as good energy efficiency, increase its value.

• The local real estate market: Supply and demand in the area directly affect the property's value.

• Additional features: Elements such as a swimming pool, sea views, or a large terrace can significantly increase the value of a property.

The appraisal is essential

Carrying out a property appraisal in Spain is an essential step to know the real value of a property, whether for buying, selling, or seeking financing. This process, carried out by a professional appraiser, ensures that the property's price is adjusted to its market value and helps you make informed decisions about the purchase or sale of your property. If this is the case for you, do not hesitate to request a professional appraisal to ensure that you get the best deal. And if you need more information about appraisals or want to learn more about the real estate market on the Costa del Sol, GR Estates is here to help. Contact us today, we are just a WhatsApp away.

The GR Estates team