I’ve been house hunting lately, and it’s been a real headache. Just when I thought I could relax after agreeing on a price with the seller, a new challenge popped up with the bank loan: the property appraisal. I haven’t seen many forum posts discussing this, so I wanted to share the pitfalls I’ve just encountered and the research I’ve done. Hopefully, it can help others who are on the same journey.
What is a Property Appraisal (Tasación)?
Simply put, a Tasación is an official valuation of a property conducted by an independent appraisal company certified by the Bank of Spain. Your bank requires this when you apply for a mortgage to determine the property’s actual worth.
This appraisal report is a mandatory requirement for a mortgage application. The bank uses this report to decide how much they are willing to lend you. It can be completely different from the seller’s asking price or the market value you see on sites like Idealista.
Why is the Appraisal Value So Important?
Because it directly determines your loan amount! Banks will typically lend you a maximum of 80% of the lower of the two values: the purchase price or the appraisal value.
For example: You find a house and agree on a price of €250,000 with the seller. However, the bank’s appointed appraiser values the property at only €230,000. In this case, the bank will base the loan on the €230,000 valuation, lending you a maximum of €230,000 * 80% = €184,000, not €250,000 * 80% = €200,000. You would have to come up with the €16,000 difference yourself, in addition to the down payment. A low appraisal can dramatically increase the amount you need to pay upfront.
The Appraisal Process: What Do They Look For?
Usually, after you’ve chosen a bank for your mortgage, the bank will contact one of their partner appraisal companies. An appraiser will then schedule a visit to the property with you or your real estate agent. They will measure the actual usable floor area, inspect the property’s condition, floor level, orientation, year of construction, whether it has an elevator, its energy efficiency certificate rating, and more. Besides the property itself, they also consider many external factors.
I’ve put together a simple table listing some of the main factors:
| Internal Factors | External Factors |
|---|
| Actual floor area and layout | Average property prices in the area |
| Year of construction and maintenance condition | Nearby amenities like public transport, schools, and hospitals |
| Floor level, elevator access, natural light | Recent sales records of similar properties in the area |
| Energy efficiency rating | Future urban planning and development potential for the area |
What to Do If the Appraisal is Lower Than the Purchase Price?
This is one of the most frustrating yet common situations, often discussed alongside topics like home insurance in Spain. If it happens to you, don’t panic. Here are a few options you can try:
Renegotiate with the Seller: Take the appraisal report back to the seller and see if they are willing to lower the price. The chances of success might be low, but it’s worth a try.
Prepare More Cash: This is the most straightforward solution—covering the gap between the loan amount and the purchase price with your own funds.
Request a Re-evaluation: If you believe there’s a clear error in the appraisal, like an incorrect floor area measurement, you can request a review from the appraisal company. This is a crucial step when buying a property in Spain and you feel the valuation is unfair. However, you’ll typically need to provide very strong evidence.
Try a Different Bank: Different banks work with different appraisal companies, and their valuation criteria might vary slightly. You can apply for a mortgage at another bank to get a new appraisal. Keep in mind that each appraisal costs between €300 and €600, so this will be an additional expense.
Buying a home is a major life event, and every detail in the mortgage process matters. I hope my experience can help make your property buying journey in Spain a bit smoother. Good luck finding your dream home!
