Valuation / Appraisal
Property valuation
- 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
In plain words
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.
When a valuation is needed
What affects the valuation
- Area and layout
- Condition and age
- Floor and view
- Area and infrastructure
- Transport links
- Development prospects
- Transactions for comparable properties
- Price trends
- Supply and demand
- Form of ownership
- Encumbrances
- Lawfulness of structures
How it works
- 01Choose an independent valuer
- 02Inspection and analysis of the property
- 03Comparison with the market
- 04Valuation report
- 05Decision on price and financing
What you need to know
- The valuation and the seller’s price are different figures
- The bank finances a share of the valuation, not of the deal price
- Programmes may count the threshold by valuation
- The valuer must be independent of the seller
- 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
What this means for a BRIDGES client
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.
Frequently asked questions
01 /What is a property valuation?
A professional determination of the market value of a property by a licensed valuer, set out in a report.
02 /Why does a buyer need one?
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.
03 /What if the valuation is below the price?
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.
04 /Who should choose the valuer?
The buyer or the bank. A valuer proposed by the seller has a conflict of interest.
05 /How long is the report valid?
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.
06 /Do programmes count the threshold by valuation?
Some do. In that case the property must reach the minimum by its valuation, not by the contract price.
See also
Read next
This material has undergone editorial review by BRIDGES.
Unsure about a property’s price?
We will arrange an independent valuation before the deal — and check it against the programme’s threshold.