Knowing the value of a property , in addition to checking if the price set by a seller is reasonable, is essential before starting a mortgage transaction for the buyer, seller and the bank, which will always request the official appraisal of a home, carried out by a company valuation approved by the Bank of Spain before offering any mortgage loan.
It is a valuation that serves to establish the value of a property in accordance with appropriate criteria and methodology regulated in Royal Decree 775/1997.
It is necessary for the bank to know the value of the home and the risk it assumes with the granting of the mortgage and it is carried out by appraisers approved and supervised by the Bank of Spain and published through the Official Registry of Entities.
The appraisals, also called appraisal reports , are essential since the bank has the guarantee that the value of the home is sufficient in case of non-payment, so it is essential that the buyer of the property know the amount of the value of the property or housing to know the disbursement and sign the mortgage loan with the financial institution.
Keep in mind that mortgages are normally granted up to 80% (sometimes 100%) of the appraised value of the home , not the sale value.
In addition, there are different methods that are used to carry out the valuation, being the valuation by comparison the most widespread formula.
By means of this method, two technical values are determined that will be called value by comparison, which allows determining the market value of a certain asset, and adjusted value by comparison, which allows determining its mortgage value.