Property Valuation: Houses and Flats

Valuing a property means determining its economic value at a specific moment in time, for the requested purpose and based on technical, legal and market criteria. This process is carried out by a qualified professional, who analyses aspects such as location, surface area, condition of the property, characteristics of the surroundings and similar market prices. The appraisal is a key step in operations such as purchase and sale, whether as a primary residence or second home or as a rental investment, mortgage application, inheritance or separation of property, as it provides an objective and documented valuation of the property.

The scope of the appraisal in both cases is the same: to establish the value of the property, but there are relevant differences in the valuation. In both cases, the basic factors of location, floor plan, surface area, age, construction qualities and state of conservation are considered, but in the flat it is also important to consider the provision of communal areas such as gardens, playgrounds and communal swimming pool, while in the villa these factors are less relevant and in exchange, for example, the plot and porches, among others, are taken into account.

The property valuation process usually takes between 3 and 5 working days from request to delivery of the report, provided that the necessary documentation is available on time. This period may vary depending on the availability of the appraiser, the location of the property and/or whether additional documentation is required, among others. In some cases, it may be slightly longer, due to singularities of the property, such as if it is occupied or rented, there is a surface right or similar.

The valuation of a property is influenced by several key factors that determine its value:
• Location: The area where the property is located is fundamental. A property in the centre of a city is not the same as one in the outskirts or in a rural area.
• Surface area: Both the built area and the usable area directly affect the value. The more square metres, the higher the price tends to be.
• State of the property: If it is renovated, in good condition or in need of improvements, the value varies significantly.
• Oldness of the building: Newer properties tend to have a higher valuation, although it also depends on their conservation.
• Height and orientation: In buildings, high flats with a good orientation (more light and views) tend to be valued higher.
• Qualities and equipment: Materials, finishes, energy efficiency, lift, garage, storage room, communal areas, etc.

If the property is rented, has development charges or is pending construction, these factors may affect its appraised value. A current rent may reduce the value if the rent is low. Development charges, such as a partial expropriation or a compulsory transfer, also detract from the value as they represent future obligations. If the property is pending works or requires renovation, the valuer will take this into account, as it implies an added cost for the buyer. In all cases, these conditions are analysed and reflected in the valuation report and may have a negative influence on the final value.

Energy efficiency can influence the appraised value of a property. A property with a high, i.e. more efficient, energy rating is often valued higher than a property with a low rating. This difference can be particularly significant in detached single-family houses, where energy consumption has a greater weight in maintenance costs.