Important tips for Valuing a Property

17th September 2024 · 5 min. read

At Christie’s International Real Estate Madrid, we understand how important it is for our clients to accurately know the true value of their property. Our team, with extensive knowledge of the sector and vast experience in selling exclusive properties, can provide an objective preliminary valuation. Additionally, if needed, we can recommend an official appraisal company.

The price of a property is essentially free and is determined by the owner’s decision. However, to ensure an effective sale within a reasonable timeframe, it is essential to consider three fundamental aspects: firstly, compliance with the current regulations of each territory; secondly, an understanding of the real estate market's behavior, which can be volatile in certain situations; and finally, the unique characteristics of luxury properties, especially considering the select type of client they target.

For this reason, setting the right price for a high-end property is a complex process, where the advice of experts proves invaluable.

To get a first approximate idea of your property's value, a good strategy is to observe recent sales in your area. If a nearby property with similar characteristics has been sold, that price can serve as an initial reference.

However, it is important to consider that the distinctive elements of each property can lead to price variations. Factors such as recent renovations, the year of construction, orientation, the type of neighborhood, whether the property is furnished or not, its potential for improvement, among others, significantly influence the final valuation.

For a detailed and precise valuation, it is advisable to hire an official appraisal company.

The main reason to obtain an official appraisal is for mortgage application purposes. In Spain, it is a mandatory requirement for any bank, as established by Law 5/2019 of March 15, which regulates real estate credit contracts. The official appraisal value is used by the bank to determine the amount of the mortgage loan that could be granted.

Other situations where an official appraisal is necessary include divorce proceedings, inheritance executions, asset reports requested by a judge or the State, or business transactions.

For high-end properties, such as exclusive villas or apartments, Christie’s International Real Estate Madrid is perfectly equipped to conduct the valuation. Thanks to our in-depth knowledge of the luxury real estate sector and our extensive property portfolio, we can offer an accurate, unbiased valuation that is aligned with the market, unaffected by real estate bubbles.

On the other hand, for official valuations, advanced tools and specialized software programs are used to evaluate all necessary elements of the property, after analyzing the required variables.

When an official appraisal is needed, the expert conducts a detailed technical inspection of the property on-site. During the visit, they take the necessary measurements to verify that the square meters reflected in the plans match reality, review the property's overall condition, and document all valuable elements. Optionally, they can make a thorough inventory of valuable decorative items.

Subsequently, they review the property's documentation and request any missing documents, such as the land registry report. Once the appraisal report is completed, the expert signs it electronically and sends it to both the client and the bank (if needed). This process can take between one week and one month. Furthermore, the appraisal is valid for approximately six months to one year.

When an official appraisal is needed, the expert conducts a detailed technical inspection of the property on-site. During the visit, they take the necessary measurements to verify that the square meters reflected in the plans match reality, review the property's overall condition, and document all valuable elements. Optionally, they can make a thorough inventory of valuable decorative items.

Subsequently, they review the property's documentation and request any missing documents, such as the land registry report. Once the appraisal report is completed, the expert signs it electronically and sends it to both the client and the bank (if needed). This process can take between one week and one month. Furthermore, the appraisal is valid for approximately six months to one year.

It is essential that the official appraisal is conducted by a person or company approved by the Bank of Spain. The appraiser must be registered and have an official identification number.

Finally, it is important to remember that the sale price must be in line with market conditions. Although a property may hold significant emotional value for its owner, the price is more closely related to the laws of supply and demand. The ultimate goal is always to achieve the sale under the best conditions. Relying on a trusted real estate agency, such as Christie’s International Real Estate Madrid, can help reassess the price if necessary to maximize profit.