Whether you already own a property in Spain and want to sell it or are looking to buy a property in Spain and ensure that you are getting good value for your money, you will need to know and understand how the property valuation system works in the country.
Property valuation is a highly regulated system in Spain. A ministerial order that was introduced in 2003 is still in force that establishes the rules surrounding the"valuation of real estate and certain rights for certain financial purposes”.
In high level terms, a property valuation is arranged with an independent expert who will appraise the home based on the estimated value that it has on the market. The value of the property should be established not only at the time of the appraisal, but should also take into account the impact of slightly longer-term market conditions.
Here’s everything you need to know about the property valuation system in Spain works:
What Factors Will Your Estate Agent Investigate?
Property valuations are generally carried out by estate agents in Spain. In order to ensure that their valuations are as accurate as possible, your estate agent will investigate the following factors before they even look at your property:
- Property identification. Is your documentation up to date? Does the house have planning permission for all of its elements? And do the details of the property match the ones outlined on its official documentation? If the technical elements of the house can’t be verified in this way then the value of the house may be impacted.
- Occupancy status? Is the house currently occupied? If so, is it occupied by the owner or by tenants? All of these factors can affect the property value. This is because if the house is under some type of protection regime, its price will be limited by the authorities.
- Architectural protection. Are there any regulations or protection orders that impact your property? These could include the property being prevented from any renovations or modifications being carried out. The reason? A property with restricted aspects can impact its price.
- Compliance. Has the property been constructed in accordance with local regulations? This is important because, if not, the property can lose significant value if it doesn’t meet these regulations.
How Is A Property Valuation Calculated?
Property valuations are often carried out by estate agents, though some lenders may also use independant assessors to secure an impartial valuation of a property. Factors used to calculated the value of a property by an estate agent include its location, surface area, age and state of conservation. Factors such as the property’s layout, views, and any additional amenities (such as an elevator or swimming pool) will also impact its value.
Estate agents are experts in their markets, and know what properties in their area is worth. With this in mind, many estate agents will also look at what other properties in the area have sold for to inform their valuation.
Is It Possible To Value Your Property Yourself?
If you need to secure a mortgage on your property then your mortgage provider or lender will want to receive an independant valuation of your chosen property. If you are a cash buyer and simply want to ensure that the property is worth what you are prepared to pay for it, then it is possible to estimate the value of a property on your own, without the support of a property agent. There are several ways in which you can do this, including:
- Use an online price estimator tool. These can show you what similar properties in your area have sold for, and will then use that information to create an accurate estimation of what your property is worth
- Look in estate agent windows. You can also work out what other properties similar to yours are worth simply by looking to see what other estate agents are selling them for.
- Take into account the age, size, location and condition of the property. It makes sense that larger and newer properties tend to have higher value that smaller, older ones. Properties that don’t need extensive renovation also tend to have higher value than those that need a lot of work.
Are you thinking of living and working in Spain? Whether you dream is to buy or rent a property in Spain, our local property experts are perfectly placed to help you find the home of your dreams. Get in touch today to find out more about how we can help you.