Appraisals are estimates of the value of a movable or immovable property carried out and supported by an Expert Appraiser. Said value is reflected in a monetary figure through an impartial technical opinion that determines its power of change at a certain date.

If it is a property, the value estimate takes into account the physical characteristics, use, market analysis and urban. Regarding a movable property, the physical condition, functionality and market value are taken into account.

Appraisals can be carried out on any type of property, which can be tangible or intangible furniture and real estate and can be of various types, so people can go to an Appraiser when they want to know the value of any of their assets. .

Benefits of performing appraisals

• When carrying out an appraisal, a precise and detailed result will be obtained, so it will be possible to obtain the exact value of the property so that the sale can be made at a fair price, in addition, the valuations that are made are based on the characteristics of the movable and immovable property. .
• These appraisals consist of a process supported by Certified Valuation Experts, so it is valid before official institutions, these experts are in charge of supervising, advising and controlling the requested assets.
• There is a wide variety of appraisals that can be made to tangible and intangible assets, so the needs are covered in a personalized way thanks to the advice, reports and reports that the appraisers make. 
• It is a document that has a confidential value, so the information of the owner and the movable or immovable property that is valued is safe at each stage of the appraisal, it also helps for better decision making.

Who can perform appraisals?

It is essential to understand that not everyone is qualified to carry out appraisals. Only Appraisers who have a professional degree and corresponding license are authorized to carry out these appraisals.

Hiring a Certified Appraiser can be done independently or through various institutions. However, it is crucial to ensure that the appraiser or institution chosen has fiscal support and is duly authorized.

A Valuation Expert acts as a specialized consultant and is qualified to prepare an opinion that estimates and quantifies the value of movable and immovable property. After completing the valuation, he or she will issue an appraisal with official validity, which can be used to carry out any required procedure.

According to Article 3 of the Regulations of the Federal Tax Code, the institutions authorized to carry out tax assessments include:

• The Institute of Administration and Appraisals of National Assets.
• Credit institutions.
• Public brokers with current registration with the Ministry of Economy.
• Valuation companies and/or professional appraisers.

This regulation ensures that appraisals are carried out with the standards of quality and objectivity necessary for their use in various transactions and legal processes.

When is an appraisal necessary?

Each appraisal responds to specific needs and provides critical information for decision making in various situations, ensuring that the parties involved have an objective basis for their transactions and actions. The choice of the most appropriate one should be decided by a specialist well informed of the case, together with the interested party.

What assets can be valued?

A Certified Appraiser can carry out the inspection of any type of tangible and intangible asset, which, in other words, everything has a value that must be determined.

A wide variety of assets can be valued in different contexts and for various purposes. Asset valuation is an important process in areas such as accounting, finance, insurance, taxes and business transactions. Some of the types of assets that can be valued include:

1. Property: Properties such as buildings, houses, commercial premises, duplexes, penthouses, lofts, apartments, studios, urban land, rural land, agricultural land, land under construction, schools, hospitals, shopping centers, parking lots, warehouses, industrial buildings, offices, service stations, sports facilities, entertainment facilities, etc.
2. Movable property: Physical properties that can be moved, such as vehicles, machinery, furniture, and equipment.
3. Intangible goods: Assets that do not have a tangible physical presence, such as patents, trademarks, copyrights, licenses and goodwill (intangible value associated with a company's reputation).
4. Financial investments: Stocks, bonds, investment funds and other financial instruments.
5. Business and companies: Business valuation is crucial in commercial transactions, mergers and acquisitions, financial planning, among others.
6. Inventory: Valuing a company's inventory is essential to determining the total value of goods available for sale.
7. Jewelry and valuables: Artwork, antiques, jewelry and other collectible valuables.
8. Natural resources: The valuation of resources such as minerals, oil, gas and wood.
9. Contractual rights: Valuation of contracts, agreements and contractual rights, such as leases and license agreements.

What aspects are taken into account when valuing a property?

Consider the general and particular details, the commercial value and the valuable information of the movable and immovable property.

Movable property	Property
Age of movable property	Age of the property
Marketing grade and/or brand	Square meters of construction
Maintenance provided to the asset	Total area
Visible/invisible damage	Quality and type of finishes
Plugins added to asset	State of conservation
incidents/repairs	Existence of electrical, hydraulic and gas installation
special depreciation	The location considers aspects such as the type of use, electricity, drinking water, public lighting, security, urban growth, access roads to the property and access to public transport.
Technology

How is the value of a movable and immovable property obtained?

There are three approaches to valuationeitherno To determine the value of an asset:

• physical or direct approach: The replacement value, as of today, of the construction materials and facilities that were used is determined. This approach will assess the terrain, buildings, facilities, or demerits.
• Comparative or market approach: It is considered according to the market offer of similar properties, in the same area or similar areas. This approach uses the comparison of factors such as: the age of the property, the location and the shape, with which its value is determined.
• Income capitalization approach: A comparison is made, based on similar properties, in the area or similar areas that are for rent, to identify the value of all future income that the property will produce. The approach determines whether the income will be constant or variable and will be determined through the Capitalization Value or income.

How long are the appraisals valid?

In general, the validity of an appraisal is from six months to one year, as long as the property does not undergo modifications during the administrative procedures, and there are no different economic conditions or modifications to the assets to those in which the appraisal was carried out. appraise.

Types of Appraisals

There are different types of appraisals and the choice of the appropriate one depends on the needs and purpose of the appraisal. According to their usefulness, we can classify them into different groups:

Differences between types of appraisals

It is important to distinguish between the different types of appraisals and understand when it is appropriate to use each. Choosing the right type is critical to ensuring that the specific needs of the transaction or process in question are met.

• commercial appraisal: Mainly used to determine the market value of a property to be purchased or sold. This type of appraisal is based on analysis of recent sales of similar properties in the same area.
• Property valuation: It is mainly used for tax purposes, determining the value of a property to calculate taxes such as property tax. It is based on an analysis of the unit values of land and buildings.
• Tax guarantee appraisal: This type of appraisal is carried out to guarantee debts with government entities. Its purpose is to establish a clear value that supports the debt.
• Appraisal for mortgage loan: This appraisal is required by financial institutions before approving a loan. It ensures that the value of the property justifies the amount of the loan requested.
• Value opinion: It is not a formal appraisal, but provides an estimate of value based on market information. It is commonly used for internal decisions within a company or for negotiations prior to a sale.

Valuation process in a common or regular case

• Quotation request and approval.

In this process, the applicant goes to a notary or a private company and the purpose of the valuation is analyzed, the time and day of the expert's visit is set, and the location of the property is later verified. 

• Delivery or sending of documentation.

The applicant submits the registration history of the movable or immovable property, with which the corresponding valuation method and the approach to be used will be determined.

• Visit and photographic report.

The Certified Appraiser Expert visits the applicant to carry out the valuation and photographic report of the assets.

• report delivery

The estimated value is delivered to the applicant, together with the certified document. 

Depending on the complexity of what you want to value will be the number of days used to do it and these will be determined at the beginning of the process. The exact information on the period of time that the appraisal will take will be specified in the quote.

Tips for homeowners and buyers

• Choosing a Certified Appraiser: Do your research and select an appraiser who is certified and experienced in the type of appraisal you need. Check reviews and ask for recommendations.
• Prepare documentation: Gather all relevant documentation and any information you consider relevant. This will make the appraiser's job easier and ensure a more accurate report.
• Understanding the process: Learn about the appraisal process. Ask the appraiser what methods he or she will use and what factors he or she will consider in his or her appraisal.
• Interpreting the report: Once you receive the appraisal report, take the time to understand it. If something is unclear, do not hesitate to ask the appraiser for clarification.

Common mistakes when requesting an appraisal and how to avoid them

1. Not checking the appraiser's certification
Always make sure that the appraiser is properly certified and has experience in the type of property you need appraised. An uncertified appraiser could compromise the validity of the appraisal. Don't hesitate to ask for references.

2. Not providing all the required information
If you don't provide all the necessary documents, the appraiser won't be able to make an accurate estimate. Make sure you have all the paperwork ready and ask if anything is missing. The more complete the information, the more accurate the appraisal will be.

3. Not choosing the correct type of appraisal
There are different types of appraisals depending on the property and the use you will give to the report. For example, an appraisal for a mortgage loan is not the same as one for a private sale. Make sure that the type of appraisal you choose fits your needs, if you are not sure, check it out with a specialist.

4. Not understanding the report
When you receive the report, take the time to read it and understand how the value was arrived at. If something is unclear, ask. It is important that you understand everything, as this report will be the one you use to make decisions.

Why is it important to have appraisals done regularly?

1. Control over the Value of your Assets
Regular appraisals help you know the current value of your assets. If you have investment properties or plan to sell at some point, getting an appraisal done from time to time will give you an idea of how the market has changed and whether it's the right time to make a move.

2. Insure Your Property Properly
An up-to-date appraisal is essential for fair insurance. If your property was valued a long time ago, it may not be fully covered in the event of a loss. Having a recent appraisal ensures that the value of your property is accurately calculated in your insurance policy.

3. Enterprise Asset Management
If you own a business, appraisals help you manage your assets more efficiently. They give you clarity on the value of your property or equipment, which is critical for making strategic decisions, such as investments, loans, or sales.

4. Board of Directors Reports – International Standards

In the business world, international accounting standards (such as IFRS) require companies to properly value their assets. Conducting periodic appraisals is essential to comply with these regulations and to provide accurate financial reports to the board of directors and investors.

5. Better Transactions – Formality

Having an up-to-date appraisal makes transactions easier, whether for the purchase, sale or leasing of property. A formal and recent appraisal provides confidence to the parties involved and ensures that negotiations are based on a fair and transparent value.

What is INDAABIN?

The Institute for the Administration and Appraisal of National Assets (INDAABIN) is a public entity in Mexico, responsible for regulating and supervising the administration and appraisal of national assets. Its objective is to ensure that the appraisal processes are carried out with transparency, professionalism and in compliance with current regulations.

INDAABIN Functions

• Regulation: INDAABIN establishes the standards and procedures for the administration and valuation of national assets, ensuring that evaluations are fair and accurate.
• Training: It offers training and updating programs for personnel involved in the administration of national assets, promoting best practices and compliance with regulations.
• Supervision: It carries out periodic audits and reviews of the processes of administration and appraisal of national assets, ensuring compliance with established regulations.

Importance of INDAABIN in Appraisals
The existence of INDAABIN is essential to ensure transparency in the management of national assets. Its work helps prevent conflicts of interest and ensure that appraisals reflect the true value of assets, which is essential in the administration and disposal of state assets.

Benefits of Appraisals Supervised by INDAABIN

• Trust: Appraisals supervised by INDAABIN are more reliable, as they are subject to specific regulations and standards.
• Legal Value: An appraisal carried out under the supervision of INDAABIN is valid before the authorities related to property management.
• Consumer Protection: Ensures that both government and citizens are protected against unfair or manipulated evaluations.

Real Estate Appraisal Example

Suppose a company wants to carry out a valuation of a piece of land to assess its development potential. The process will take place in eight stages, as detailed below:

Stage 1: Reception of Application and Information Base

The company submits its valuation application, providing a number of key documents:

• A location plan of the land.
• A topographical plan showing measurements and boundaries.
• The land deeds.
• The record of land use.
• Architectural plans approved by the competent authority.

The appraiser reviews this information to ensure it is complete and appropriate for the process.

Stage 2: Identification of the Asset to be Valued

The appraiser reviews the application and the documents provided to identify the specific land to be appraised. The purpose of the appraisal is determined here, which in this case is to assess the development potential of the land. A date is set for the appraisal and an appointment is arranged for the physical inspection of the property.

Stage 3: Inspection of the Asset to be Valued

During the inspection, the appraiser examines the land and its physical characteristics, such as its shape, size, and accessibility. He or she also assesses the surroundings, taking note of the infrastructure and services available in the area, which can influence its value.

Step 4: Information Gathering

The appraiser conducts market research, gathering data on similar lots in the neighborhood. This includes analysis of pricing, permitted uses, and features of the land that could affect its value. Location and real estate market trends in the area are considered.

Stage 5: Selection of the Technical Procedure

Based on the information gathered, the appraiser selects the most appropriate technical procedures to determine the value of the land. This may include comparative market methods, cost and income analysis.

Stage 6: Calculation of Value Indicators

Selected approaches are applied to estimate the value of the land. For example, the appraiser uses the comparative approach to determine a price range based on recent sales of similar land. Value indicators are obtained that reflect the potential of the land.

Stage 7: Weighting and Obtaining the Conclusive Value

The appraiser applies a weighting to the value indicators obtained, multiplying each indicator by a percentage that reflects its relevance to the particular case. This allows for a more accurate final estimate of the value of the land.

Stage 8: Preparation of the Work and Valuation Opinion

Finally, the appraiser writes a detailed report that presents all findings, procedures used, and the final estimated value. The report is clear and accessible, aimed at people who may not be familiar with the appraisal process, ensuring that all stakeholders can understand the rationale behind the determined value.

Note

It is important to note that this is an example of a specific methodology used by INDAABIN, but there are other ways of carrying out appraisals that may vary depending on the context and specific requirements of each valuation.

Frequent questions

What is an appraisal? ▼

An appraisal is basically an estimate of the value of an asset, whether movable or immovable, made by an Appraiser. This expert will give you a fair value backed by a technical opinion, helping you determine how much your properties are worth at a specific time.

In the case of a property, the appraisal takes into account characteristics such as size, location, condition and other key factors. For personal property, such as vehicles or machinery, aspects such as physical condition and market value are analyzed.

Why should I have an appraisal done? ▼

Having an appraisal done has multiple benefits. The main one is that you get an accurate and detailed value of your assets, which helps you sell or acquire properties at a fair price. In addition, these appraisals are backed by Certified Appraisers, which gives them official validity before any institution.

Appraisals are also confidential, ensuring that your property information is protected and helping you make informed decisions on issues such as sales, insurance or taxes.

Who can carry out an appraisal? ▼

Not everyone can make an appraisal. Only certified Appraisers, with the appropriate training and license, can make these estimates. You can hire them independently or through authorized institutions.

When should I have an appraisal done? ▼

Appraisals are necessary in many situations. Here are some examples:

• Buying or selling property: To determine a fair price in a transaction.
• Mortgage loans: Banks require an appraisal to ensure that the property has the necessary value to support the loan.
• Taxes: To calculate the cadastral value and determine taxes such as property tax.
• Insurance: To ensure that your property is correctly valued in your policy.

What assets can be valued? ▼

An Appraiser can value almost any type of asset, whether tangible or intangible. This includes:

• Real estate: Houses, land, commercial premises.
• Movable property: Vehicles, machinery, furniture.
• Intangible assets: Patents, trademarks, copyrights.

What factors are taken into account when valuing an asset? ▼

To value a property, factors such as age, size, location and condition are analyzed. In the case of movable property, factors such as age, general condition and market value are considered.

How is the value of an asset determined? ▼

There are different valuation methods, such as:

• Physical or direct approach: The materials and construction costs of the property are evaluated.
• Comparative approach: It is compared with similar properties on the market.
• Income capitalization approach: Based on the value that future income could generate.

How long is an appraisal valid? ▼

Appraisals are generally valid for between six months and one year. If there are no significant changes in the property or in market conditions, that value remains valid.

What should I keep in mind when requesting an appraisal? ▼

• Choose a certified appraiser: Make sure the professional has the proper training.
• Be prepared with documentation: Have all necessary information, such as deeds or certificates, on hand to make the appraisal more accurate.
• Understand the process: If you have questions about how the appraisal is done, ask the appraiser. It's important to know how the final value was arrived at!

Why do regular appraisals? ▼

It is useful to have an appraisal done from time to time to keep track of the value of your assets. This is especially important if you plan to sell or acquire property, make adjustments to your insurance policy or manage your business assets.

What is INDAABIN? ▼

INDAABIN is the Institute for the Administration and Appraisal of National Assets in Mexico. It is the agency responsible for regulating and supervising the appraisal processes of state assets, ensuring that they are transparent and fair.