FREQU

FREQUENT QUESTIONS

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1) How valid is a commercial appraisal and what is it for?

The appraisals that are made for mortgage purposes have legal effects, so they are subject to compliance with rules regarding who can make them and how they must be made, in order to ensure that the appraised value that is calculated is valid.

 

2) How long is a commercial appraisal valid?

It depends on the purpose. In the case of a mortgage appraisal, the regulations establish a validity period of six months from the date on which the report was issued, which cannot exceed 60 days from the last visit to the property.

 

3) How is an appraisal performed?

The appraiser analyzes the property, its characteristics and the necessary documentation. He/she studies the supply, demand and expectations of the real estate market, regarding properties comparable in terms of use and typology with the one being appraised and makes a survey of witness values of properties for sale, or of recent transactions, homogenizing the values in relation to the property being appraised.

 

4) What are the differences between a commercial appraisal and an appraisal?

Appraisal: It is a legal document that certifies the value of the property for a described purpose, carried out with a methodology based on a legal regulation.

Valuation: It is a report that establishes the indicative value of a property through the application of various valuation methods, but does not have a legal validity as it does not conform to a regulated valuation procedure.

 

5) What information does the appraisal contain?

Designated by the company the competent technician for the realization of the valuation, once analyzed the order and received documentation, this one will proceed to communicate with the person facilitated like contact for the visit to the building and to carry out the following verifications and performances:

 

The following will be attached as annexes: photographic report of the property, the legal documentation provided, location plans of the property and any other documentation provided that has been taken into account to prepare the appraisal.

Reliable verifications carried out by the technician:

• Real address that appears in the deeds or registry note provided.

• Different surfaces of the property.

• Description and boundaries of the property.

• State of conservation.

• Construction characteristics, finishes, installations and infrastructures.​

 

6) I have a previous appraisal of my home from another appraisal company other than the one that is currently appraising my home, does it help?
No. An appraisal company must rely on market samples obtained at the time of the appraisal. If the previous appraisal was done a few months or years ago, it is possible that the market samples obtained were higher or lower than those available at the time.

In addition, it is possible that this appraisal was poorly done, so an appraiser must always start from 0 and make all the necessary checks, without relying on any other report.

 

7) Why is it that if I order two appraisals of the same property from different appraisal companies the value obtained may be different?
An appraisal is based on market samples. It is enough that each appraiser uses some market samples instead of others and the appraisal will be different. They will never be exact, but if they are well done they should be similar.

 

Appraisals are not exact mathematics. They are an approximate estimate of the sale value of a property, so the final value may vary. Remember that the highest appraised value is not always the correct one. It is very common for the client to hold on to the higher value and believe that the appraiser who gave the lower value is incompetent, and this may not be the case. It is possible that the appraiser who gave the higher value was wrong.

 

8) Why does the bank give me 80% and not 100% of the appraised value?
This question would be better asked to the banks. The banks give a % of the appraised value depending on the risk. Normally if the property to be mortgaged is a house, they give 80%. If it is an industrial building or office, they give 60%. These figures may vary according to the bank or savings bank.

 

9) My property is rented, does it affect the appraised value?
When a property is rented, in addition to being appraised by the comparison method, it must also be appraised by the rental update method. This method is based on mathematical formulas, which estimate the value of the property based on the benefits obtained from the rental. Between the value obtained by comparison and the value obtained by updating rents, the lower of the two is adopted for valuation prudence.

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