Property / Sales · October 29, 2021

Appraisals and commercial appraisals or expert opinions. Which one do I need?

You may have heard about appraisals and appraisals. These terms are unfamiliar but they affect the most important transactions of your life. Because the purchase and sale value of your property depends on this process.

In this blog post, you will learn about the role of appraisals, real estate appraisals and home inspection. Thus, you will be able to identify the indicated process to estimate and appraise the value of your property.

What is a home appraisal?

A home appraisal is the calculation of the determined value of a house or apartment, according to legally defined standards. The appraisal is done by certified appraisers. Which study the characteristics of the home to set its value, for this reason the appraisers have to be experts in real estate.

Who does a home appraisal?

The home appraisal is carried out by a certified appraiser who must have technical and theoretical knowledge about the area to be evaluated. In the case of real estate appraisal, the appraiser is an architect who knows the market, specifications and construction materials.

Appraisal and appraisal study in Colombia Home appraisals and appraisals in Colombia Who does the home appraisals in Colombia?

What does an appraiser do?

Here we will tell you what are the functions that an appraiser has to develop to set the price of a home:

Top 7 activities of an Appraiser.

  1. Study the characteristics of the house.
  2. Draw the sketch of the property.
  3. Take pictures of the house.
  4. Collect data on the facade, surface, measurements, view and the environment.
  5. Check the veracity of the property documentation.
  6. Identify the existence of debts and mortgages.
  7. Compare the characteristics of the appraised property with others in the area.

When the appraiser is exercising his function, he takes into account the surface of the house, the age and the state of conservation. Also look at the materials and finishes of the construction, the commercial establishments or places of interest that are near the property. This data allows you to determine a price for the house. Which is valid for no more than 6 months, from the issuance of the same.

Home appraisal benefits

The home appraisal process is important to both the seller and the buyer. This allows knowing the real value of the property and making a transaction of fair profit for both parties of the negotiation, which will make the buying and selling process easier, faster and those involved feel satisfied at the end of the transaction.

When requesting a home equity loan or financing for a home purchase, banks will request an appraisal to determine the value of the home and make the loan.

Keep in mind that the maximum amount for which banks will lend you for a new or used home mortgage is 80% for low-income housing and 70% of the total cost of the property for other homes. So, doing the appraisal process allows you to speed up access to a loan. In addition, you are aware that you are not going to sell your house below its real value or buy a property at a higher price.

Learn about the benefits of doing a home appraisal.

Another way to know the value of a property is through a commercial property appraisal. This is a process most used in Colombia.

You must be wondering what the difference between appraisal and valuation is.

Difference between appraisal and valuation

The difference between appraisals and appraisals to fix the value of the property is that the appraisal is a document with legal validity while the appraisal is an estimate. However, both documents are valid when requesting a loan from a financial institution.

Real estate appraisals

Real estate valuations are a guide for the seller when deciding to sell their property.

Valuations are made by comparing certain characteristics with other properties in your area. Their benefit is that they allow you to get a global idea and for consultation of how much your home is worth; you can obtain this study virtually or in person, depending on the company with which you carry out the procedure.

There are two types of commercial appraisals, certified appraisals and non-certified appraisals.

Certified appraisals

Certified appraisals have an official character. Therefore, the value that is set for your property comes from the visit of a professional appraiser. The appraiser studies the finishes in the bathrooms, quantity and condition of the rooms, kitchen materials, adaptation of balconies and the general condition of the house.

Although there are different organizations and companies that carry out certified appraisals, you must choose according to the professional trajectory and reputation of the same. Remember that the value of your property is at stake.

When choosing an appraiser, make sure they are registered with a Recognized Self-Regulation Entity (ERA). These are supervised by the Superintendence of Industry and Commerce, and thus you have the guarantee that the appraiser is registered in the Open Registry of Appraisers, and therefore their opinion on the value of the property is certified.

How much does a certified business appraisal cost?

The price of the certified commercial appraisal varies depending on the company or the expert that performs it. However, there are common methods, which they use to determine the price of the service.

  •  1 × 1000 of the appraisal: This method consists of charging 1 peso for every 1000 pesos of the value determined in the commercial appraisal or the cadastral appraisal. The cadastral appraisal only takes into account the physical characteristics of your property and the land. On the other hand, the commercial appraisal if you look at the finishes and future projections of the house and its area.

With this method, if your property is valued at $ 23,000,000 COP (Two hundred and thirty million pesos), you will have to pay for 2,300,000 COP (Two million three hundred thousand pesos).

  •   Fixed rates: There are commercial appraisers who use fixed rates for the payment of their fees.
  • Base rate + 1 × 1000: This method consists of setting a base rate and adding 1 × 1000 of the cost of the property. Usually the minimum base rate is $ 300,000 COP
  •  According to location, surface and stratum: There are appraisers who set their rates taking into account the location, the built surface or the land and the stratum in which the property is located.

Non-certified appraisals

A non-certified appraisal is an estimate of the real price of your home, which is made from the comparison of the generalities of a property with the characteristics of other homes that are in the same area.

Although this process can help you get an idea of ​​how much you should sell or buy the house for, it differs from the certified appraisal, in that it has no validity before institutions or companies, in such a way that the estimated price is not valid when you want to get one mortgage or take out a loan.

At Habi, we created Habanero, a tool in which you can consult the commercial appraisal of your house or apartment, online and totally free.

Taximeter is very useful to calculate the approximate price of your property. This tool gives you an estimate very close to reality without having to invest money in real estate appraisals and valuations. Habanero does not require a face-to-face visit and everything you need to know about the property can be found in a detailed summary that will take less time and effort than if you did it on your own.

Why choose Habanero to know the value of your property?

If you are looking to calculate the value of your property to sell, buy or out of curiosity, Habanero is an agile and effective way to estimate the value of your home and the best thing is at no cost.

With this Habi tool, you will be able to know the total estimated price of your house, the value of the square meter in the area, the cost of notarial expenses, the price of the rental fee, the quantity and the sale price of other properties in area.

The best thing about this tool is that it is based on artificial intelligence and big data analysis to give you an expert, objective and realistic opinion of how much the property costs.

What is an appraisal of a house?

This third real estate study has the same function of calculating the value of your home but based on strictly objective aspects. That is, construction materials, quality of floors, maintenance of walls and structural elements such as roofing in which it is indicated in what state your property is.

As its name indicates, the housing survey is carried out by an expert who consolidates a normally long document that collects the reasons or motives for which a certain value is given to a property.

This real estate study is much less frequent, but it is needed when there is a disagreement during a judicial procedure or there was a breach of the rules that cause construction defects.

Home appraisal, price reference or expert opinion When to choose each one?

Since you already know the implications and differences of appraisals and appraisals, and house surveys, analyzing why you need to know the price of the house will help you determine which of these real estate price studies you should choose.