The word valuation refers to the estimation of the worth of a certain object. In this case, we are referring to the value of a property. Another term that also plays a key role in the process is mortgage valuation, which is a valuable document for the mortgage lender, to know if it is safe to grant a mortgage on the property.
The valuation report is therefore of great importance and should be taken care of by an expert, as this person can indicate whether the buyer has enough financial capacities. If the valuation concerns a house, then it will be carried out by an architect. He will be the professional valuer, who is also officially called a surveyor.
In this article by ShMadrid, we would like to share some of the aspects of valuing a property, so the subject of a valuation gets clearer for you.
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What you should know about house valuations
First of all, it is very important to know the main elements and key features of a house valuation. Some of the aspects considered part of a proper valuation are the following:
- The location of the property. Certain details are necessary to look at, like whether there are commercial premises in the vicinity, or whether you have access to public transport services.
- The type of housing. This is important, because it is logic that buying a large villa is not the same as buying a small studio, and a fifth floor apartment is obviously different than a ground floor apartment.
- The home’s surface. If the property has more square metres, the value will be higher than if it has less square metres.
- The age of the property. The age of a house or apartment can be of influence on the current state it is in. It can also say something about the quality of the original construction.
Once all these elements are clear, finding properties with similar characteristics is next on the list. As a result, the surveyor will be able to determine a more accurate value of the property, because of these reference objects.
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After having done intensive research and having evaluated all the important aspects, such as those mentioned before, the expert will then enter all the collected data into a valuation programme. The result is presented in a complete and final valuation report.
What the surveyor will do next, is verifying if all data is accurate and if all Land Registry regulations, regarding the location and general characteristics, for example, have been complied with.
Once this has been verified, the valuation report will be handed over to the client. He or she will then take this report to the bank, in order to proceed with the mortgage. So basically, home valuation serves the buyer when he wants to buy a home that he cannot (fully) pay for himself.
If you need a mortgage, then it is good to know that the bank usually only finances a maximum of 80% of a property’s value. The remaining 20% should come out of your own pocket.
So every buyer depends on savings, or you will have to take out a loan from a company that specializes in microloans.
What else do you know about valuations?