Real Estate Appraisals - Types of Real Estate Appraisals | Certified Appraisers
What are Real Estate Appraisals?
A real estate appraisal is a process performed by an expert to determine the value of a property, whether it's a home, office, land, or commercial property. This analysis provides an accurate estimate of the asset's current value and ensures that decisions about buying, selling, or investing are based on objective and reliable information. Whether purchasing your first home or calculating the value of a property for financial purposes, an appraisal allows you to make informed decisions and avoid surprises.
What are Real Estate Appraisals for?
Property appraisals are essential in the real estate sector because they establish the fair value of a property or land. In addition to being essential in the purchase, sale, or rental of properties, they are necessary in various financial transactions, such as obtaining mortgage loans. By offering a professional and objective evaluation, appraisals allow parties to make informed and fair decisions. In a constantly changing market, knowing the true value of a property is key to ensuring a profitable investment and avoiding potential conflicts or losses.
Why is it important to carry out a real estate appraisal?
| Benefits | Description |
|---|---|
| Price certainty | An appraisal provides you with a fair and accurate property value, allowing you to make informed decisions based on objective data, avoiding surprises or overpayments. |
| Prevent legal conflicts | A detailed, official appraisal can prevent legal disputes related to property value, especially in cases of inheritance, partnership dissolution, or any situation where the parties need an impartial agreement on the asset's value. |
| Optimization in pricing | An appraisal allows for setting an appropriate and competitive price in the market, avoiding both financial losses due to a low price and the possibility of not selling due to overvaluation. |
| Evaluation for tax and accounting purposes | Real estate appraisals are essential for calculating taxes, such as property tax, and are used in accounting and financial processes. |
| Investment advice | If you're looking to invest in real estate, an appraisal provides you with a clear view of the property's potential profitability, as well as the risks associated with its future market value. |
| Insurance valuation | An appraisal can help ensure that, in the event of damage, the homeowner receives adequate compensation. |
| Access to better credit conditions | Financial institutions, such as banks and credit unions, often require an appraisal to grant mortgage loans. A clear and well-determined property value can facilitate loan approval and allow for better financing terms. |
Types of Real Estate Appraisals
Commercial Appraisals
The commercial appraisal is useful to know the real value of the property, that is, what is its price in the market to establish a purchase-sale position or for internal information of the companies.
Deed Appraisals
It is requested by the notary public, who requires the appraisal so that, based on the commercial value, he prepares the budget for the deed of the property.
Tax Guarantee Appraisals
It is the estimation of the commercial value of a good in order to guarantee a debt to a government agency such as: the SAT, IMSS, INFONAVIT, etc. Whose purpose is to leave it as a guarantee or dation in payment.
FOVISSSTE and INFONAVIT credit appraisals
Appraisal with which the user exercises his right to acquire a property through a credit on a certain date.
Insurance appraisals
Through this appraisal the cost of replacing or reproducing a good, after deducting the cost of the items specifically excluded in the insurance policy.
Value Opinions
It is the estimation of value specifically based on the market information of properties similar to the subject to be valued, only the Market Approach is carried out.
rental appraisals
It is the result of the process of estimating the most appropriate amount, expressed in monetary terms, to pay for the lease of a good.
Appraisal of transfer of ownership
Determines the value of a property in the context of a property transaction. Its main purpose is to establish a fair value that reflects current market conditions.
Investment appraisals
Used to determine the value of a property from the perspective of its long-term profitability, considering factors such as rental income, appreciation potential, and operating costs.
judicial appraisal
It is carried out by order of a judge to resolve legal disputes over the value of a property in cases of inheritance, divorce, expropriation, or any other type of legal dispute.
Appraisals of historical or heritage value
It focuses on properties with cultural, historical, or artistic value, such as monuments, ancient buildings, or properties with some type of heritage protection. It is relevant when the property's value is not only monetary but also historical.
Damage assessment
It is performed to determine the value of a property after damage or disaster, such as a fire, flood, or earthquake, in order to calculate the cost of repairs or reconstruction.
Appraisal for expropriation
This type of appraisal is requested when a property is to be expropriated for reasons of public interest, such as infrastructure projects or urban expansion. The appraisal determines the compensation due to the owner.
Appraisal for business restructuring
It is used when a company is undergoing a restructuring, whether through mergers, acquisitions, or asset reorganization. The properties are evaluated to determine their value within the new corporate structure.
Environmental impact assessment
It establishes the value of a property by considering environmental factors, such as proximity to protected areas, natural hazards (floods, landslides), or pollution that may affect its value.
Other Appraisals
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What properties can be valued?
Houses
Departments
Buildings
commercial premises
Malls
Offices
schools
Sports facilities
hospitals
Parking lots
Industrial ships
wineries
agricultural land
Land under Construction
urban land
Rural Land
forest land
Museums
Lofts
Duplex Houses
Studies
Attics
Cabins
Service Stations
Hotels
Entertainment Facilities
Zoos
Parks
Gyms
Restaurants
If you can't find the property you need appraised, contact us. We have a solution for your needs.
What is the process of a Real Estate Appraisal?
- Request for appraisal: The owner or person interested in the property contacts a certified appraiser to request an appraisal.
- Document review: The appraiser reviews relevant documentation, such as deeds, plans, and property history, to gather the necessary information.
- Property inspection: The appraiser visits the property to assess its physical condition, dimensions, finishes, and specific features, taking notes and gathering visual information.
- Market Analysis: A comparative market study is conducted, reviewing similar properties in the same area, recent sales, and similar property prices.
- Value calculation: With the data obtained, the appraiser applies different valuation methods, such as the comparative approach, cost approach, or capitalization of income, to determine the property's true value.
- Preparation of the report: Finally, a detailed report is prepared that includes the findings, the analysis performed, and the final value determined. This report is legally binding and is delivered to the applicant.
Who can do real estate appraisals?
The real estate appraisals must be carried out exclusively by a expert appraiser, a certified expert who has a professional license issued by the Ministry of Public Education (SEP), which endorses and authorizes him as a real estate appraiser. Depending on the purpose of the appraisal, the expert must also be registered with other relevant institutions.
According to Article 3 of the Regulations of the Federal Tax Code, the entities authorized to perform tax appraisals include:
- He Institute of Administration and Appraisals of National Assets.
- credit institutions.
- Public corridors with current registration with the Ministry of Economy.
- Valuation companies I professional appraisers.
What aspects are taken into account in a Real Estate Appraisal?
A Real Estate Appraisal is carried out by analyzing different factors such as:
- Age of the property
- m² of construction
- Total area
- Quality and type of finishes
- State of conservation
- Existence of electrical installation
- Existence of hydraulic installation
- Existence of gas installation
- Location – Within this point the following are considered:
- Type of use
- Street lighting
- Drinking water
- Electricity
- Access to public transport
- Security
- Urban growth
- Access roads to the property
How is a Real Estate Appraisal done?
There are 3 real estate valuation approaches to determine the value of real estate:
| Method | Description |
|---|---|
| physical or direct approach | This method is based on the calculation of the property's construction materials and facilities. The cost of the resources used to build or renovate the property is analyzed, allowing its value to be determined from a more technical and structural perspective. |
| Comparative market approach | Here, the value of similar properties in the same or nearby areas is considered. The sales price of properties with similar characteristics is compared to determine a fair and updated market value. |
| Income capitalization approach | In this case, the value of the future rental income the property will generate is analyzed. A comparison is made with similar rental properties in the same area to estimate the return the property could offer over time. |
How long are real estate appraisals valid?
In general, the validity of a real estate appraisal is from six months to a year, as long as the property is not modified during the administrative procedures and there are no economic conditions different from those in which the appraisal was carried out.
How much does a real estate appraisal cost?
| Type of property/square meters of construction and/or land | Cost of Commercial Appraisal |
|---|---|
| House of 60 to 150 m2 | $3,400.00 |
| House from 151 to 250 m2 | $3,700.00 |
| House of 251 to 350 m2 | $4,300.00 |
| House of 351 to 450 m2 | $4,800.00 |
| House from 451 to 650 m2 | $6,400.00 |
| House of 651 to 750 m2 | $7,200.00 |
| House of 751 to 850 m2 | $8,400.00 |
| Apartment up to 50 m2 | $3,600.00 |
| Apartment from 51 to 100 m2 | $3,800.00 |
| Apartment from 101 to 150 m2 | $4,000.00 |
| Apartment from 151 to 200 m2 | $4,300.00 |
THE VALUES IN THIS TABLE ARE AN EXAMPLE, THE COST OF THE APPRAISALS DEPENDS ON MORE SPECIFIC FACTORS OF EACH PROPERTY. THE REAL COST MAY VARY.
How does an appraisal affect the real estate market?
The value of a property depends not only on its physical characteristics but also on the changes and conditions of the market in which it is located. Below, we explain some external factors that can influence a property's value:
- General economic situationThe state of the economy, both nationally and locally, influences how much buyers can spend. If there's a recession, prices tend to fall, but when the economy grows, property values typically rise.
- Interest ratesMortgage interest rates have a direct impact on property values. If rates rise, fewer people can access financing, which can cause prices to freeze or fall.
- Real estate market trendsWhat's happening in the market also affects prices. In areas with excess supply, prices can fall, while in places where demand is high, prices tend to rise.
- Legal changesNew laws about how land can be used or how buildings are constructed can change how a property is valued. For example, if a law is passed limiting the construction of tall buildings, properties in that area could see an increase in value.
- Social and demographic factorsPopulation growth or the arrival of new infrastructure, such as schools, hospitals, or parks, can make an area more attractive, increasing property values in the area.
What does an appraisal include?
Determining the Value of the Property
Photographic report
