Updated
GL-V-07
01 / In 30 seconds
The short answer
- What it is
- Professional determination of the market value of a property
- Who does it
- A licensed valuer, often accredited by a bank or authority
- Why it is needed
- For a mortgage, taxes, programmes with an investment threshold and for your own check of the price
- The key point
- The valuation may come in below the seller’s price — and that changes the whole deal
- What matters
- The valuer must be independent of the seller and developer
02 / In plain words
What Valuation / Appraisal means
A valuation (appraisal) is a professional determination of the market value of a property carried out by a licensed valuer. A valuation report is needed by the bank for a mortgage, by the tax authorities when calculating charges and, in investment programmes, to confirm that the property meets the minimum threshold.
For the buyer it is also a checking tool. The price the seller names is their negotiating position, not a market figure. An independent valuation shows how justified that price is. A valuation that comes in noticeably below the asking price happens regularly, especially in markets aimed at foreign buyers.
Such a gap has practical consequences. The bank will finance a share not of the deal price but of the valuation — and you will have to make up the difference with your own money. If a programme counts the investment threshold by valuation, the property may fall short of the minimum. That is why the valuation is ordered before the deal and from a valuer independent of the seller.
A case from practice
An independent valuation of a property came in below the asking price. This became an argument in negotiations and also showed that, with a mortgage, the difference would have had to be made up from the client’s own funds. Ordering the report before signing proved to be the decisive step.
When a valuation is needed
- Obtaining a mortgage
- A property for an investment programme
- Checking whether the price is justified
- Calculating taxes on the deal
- Estate administration
- Insuring the property
03 / What it covers
What affects the valuation
Property
- Area and layout
- Condition and age
- Floor and view
Location
- Area and infrastructure
- Transport links
- Development prospects
The market
- Transactions for comparable properties
- Price trends
- Supply and demand
Legally
- Form of ownership
- Encumbrances
- Lawfulness of structures
04 / How it works
How it works
Choose an independent valuer
Inspection and analysis of the property
Comparison with the market
Valuation report
Decision on price and financing
05 / Key facts
What you need to know
01
The valuation and the seller’s price are different figures
02
The bank finances a share of the valuation, not of the deal price
03
Programmes may count the threshold by valuation
04
The valuer must be independent of the seller
05
The report is current for a limited period
Common mistakes
- Using the valuer proposed by the seller
- Treating the advertised price as the market value
- Ordering the valuation after signing the contract
- Not taking into account the gap between valuation and price with a mortgage
- Using an out-of-date valuation report
06 / Expert advice
How to prepare in advance
The valuation is ordered before the contract is signed and from an independent specialist — ideally one accredited by the bank if a mortgage is planned. Requirements are confirmed in advance: whose valuation the programme or bank accepts and how long the report remains current. A gap between the valuation and the seller’s price is grounds for negotiation, not a reason to hurry.
What we do for you. We always recommend an independent valuation before the deal, especially in markets aimed at foreign buyers. It protects against overpaying and shows in advance whether the property will reach your programme’s threshold.
Igor VentsHead of real estate, Title Deed and property checks
07 / Questions
Frequently asked questions
A professional determination of the market value of a property by a licensed valuer, set out in a report.
To understand whether the seller’s price is justified, to obtain bank financing and to confirm that the property meets the investment programme’s threshold.
It is grounds for negotiation. With a mortgage, the bank will finance a share of the valuation, and the difference will have to be paid from your own funds.
The buyer or the bank. A valuer proposed by the seller has a conflict of interest.
For a limited time — the period depends on the country and the requirements of the bank or authority. An out-of-date report may not be accepted.
Some do. In that case the property must reach the minimum by its valuation, not by the contract price.
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