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If you are in the process of buying a home in Spain, chances are that you will need a mortgage to finance your investment. According to a Fotocasa study, 75% of Spaniards require financing when buying a property. In order to access a mortgage, it is crucial to have an accurate appraisal to determine the real value of the property. In this article, we will explore the ins and outs of real estate appraisals, their importance in obtaining a mortgage and how they work in the Spanish context.

Why are Real Estate Appraisals Crucial?

A real estate appraisal is a certified and approved process that establishes the exact value of a property based on official objective parameters. To carry out this process, it is necessary for a specialized technician or architect to perform an on-site evaluation. When banks evaluate the granting of a mortgage, they base it on the official appraised value, not on the purchase price. In general, they usually grant a loan of 80% of the appraised value, although in favorable cases this percentage may increase to 90% or even 100%.

Appraisals are also relevant in situations of property distribution during a divorce or inheritance, as well as to demonstrate solvency. In addition, if you wish to sell your property, an appraisal can help you set an appropriate selling price. If you prefer an approximation of value, you can resort to a real estate appraisal, a free service offered by Fotocasa.

The Role of Appraisals in the Mortgage Process

Many lenders provide appraisal services as an integral part of the mortgage process. While this may be convenient for the client, it is important to know that it is not mandatory to accept this service.

You are free to choose which appraiser to hire, as long as it is a professional approved by the Bank of Spain for the appraisal to be valid. However, it is the future buyers who must assume the costs of the appraisal according to the current mortgage law. Prices vary between appraisers.

Transfer of Appraisals between Banks and Other Considerations

It is possible to transfer an appraisal from one bank to another. In situations where an earnest money contract is signed but the bank does not approve the mortgage, it is common to look for another entity that offers more suitable conditions. If the initial bank performed the appraisal of the property and you paid for it, they are obligated to provide you with the appraisal. In addition, according to the Mortgage Market Regulation Law, new banks are legally obliged to accept an appraisal signed by a company approved by the Bank of Spain, as long as it is current. The appraisals are valid for six months.

Beyond transferring appraisals between banks, remember that you can also freely choose the appraisal company that best suits your needs, negotiate mortgages with different entities and request revisions of the appraisal report if necessary.

In summary, real estate appraisals are an essential part of the mortgage process in Spain. Understanding their function, expiration and available options will allow you to make informed decisions and ensure a smooth path to your home purchase.

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