Real Estate

Guide to carry out a real estate appraisal

There are many reasons for conducting real estate appraisals , including: buying, selling, establishing a tenant fee, acquiring a mortgage or other guarantees and for income statements, among others. According to the law, these procedures must be carried out by certified experts (generally through real estate companies) and must be developed under certain criteria so that the results are not only reliable, but valid for any of the procedures mentioned above.

What are the types of appraisals that govern in Colombia?

In Colombia, two different types of appraisals are handled, which allow knowing the real value of a property , in addition, the procedure to carry out each one must comply with all the requirements and required documentation. Next, we tell you what they are: 

• Commercial appraisal: it is necessary to specify how much a property can cost for a sale, in this regard, a commercial appraisal is needed that allows knowing the commercial value of the property . This is the one requested by banks when an owner requests to mortgage their property to request a loan. It will be through this appraisal that action can be taken in the event of non-payment by the applicant.

• Cadastral appraisal: when the objective is to know the basis for calculating the property tax, the appraisal or cadastral value of the property must be taken into account. It is here where you should be guided by documents from the Agustín Codazzi Geographical Institute, the entity assigns a value to each property in the different processes of formation, updating of formation and cadastral conservation. In addition, the value of the real estate market is taken as a reference, without being exceeded.

What properties can an appraisal be carried out?

Commercial real estate appraisals can be performed on properties ranging from houses and apartments to offices and warehouses. These can be located in rural or urban areas, the necessary thing is to want to lease, sell or buy so that your property is a candidate for an appraisal.

The stipulated time to carry out an appraisal will depend on different factors such as characteristics of the property and the appraisal company or expert you choose for this service. The estimated time is 3-4 days (after inspection) for the entire report to be ready, unless extra information is necessary, the days may vary. 

Can I carry out the appraisal myself?

If you are wondering how the appraisal of a house or apartment is carried out with the aim of doing it yourself, either to save the work and the cost of an appraisal, you must bear in mind that the consequences of not doing it are quite negative.

On the one hand, it will be an invalid study that cannot be used in a legitimate way to carry out any commercial action with your property. In addition, you will not obtain an exact or real result, because the appraisers are the only ones who have the expertise and the necessary knowledge to be able to give you a value that corresponds to the reality of the market and the characteristics of your asset.

All this without taking into account that, in the most negative scenario, making an appraisal with an uncertified person may incur legal action. 

What should an appraisal contain?

The commercial appraisals are performed in different steps that allow account various aspects such as the location of the property, square meters, time of use, quality of finishes, good maintenance, among others. A piece of land is reviewed where it is located geographically, if it is urban, the square meters and the density for construction, limitations and height. 

In general, they must contain a very complete description of the property, both the physical part, as well as the location area and its legal situation. In addition, they must be clear in aspects such as urban regulations, references of public services, conditions of the place where it has been built and particular data of each property.

What should I take into account when making the appraisal of my property

• Real estate appraisals are essential when you have doubts about the real price of the property. In addition, through the appraisals, the changes that the market has had, the improvements to the housing unit and, not least, the transformation of the environment are determined. It is through the appraisal that financial entities obtain the guarantee to make loans.

• It is of the utmost importance that the person carrying out the appraisal is backed by an entity such as Blue World CIty Engineers or Appraisers. Since 2017 and for a period of one year, appraisers have the possibility of registering in the Open Registry of Appraisers, this entity has the ability to certify professionals in the sector.

• Property appraisals allow you to determine the correct and fair cost of your property. In addition, it teaches you what the market is willing to pay and if both aspects coincide.

Three basic methods for conducting real estate appraisals

1. Market comparison

Comparative market analyzes are procedures by which appraisers analyze an asset based on other properties that have similar characteristics in the same reference area. The objective of this study is to know how attractive and competitive a property is in a given geographic area and in relation to other similar properties.

This type of studyhas a wide variety of advantages. 

2. Income method

It consists of applying a profit percentage of the commercial value of the property under conditions of use, without taking into account valuations and inflation and equating it with real bank interest rates.

3. Replacement costs

It is carried out in deteriorated buildings. In addition, the value is calculated taking into account the cost of rebuilding the property.

Online appraisals, a way to obtain a reliable result

The to valúos property online  they are a quick, easy and legal way to get a reliable result for use in any commercial action you want to take your property. This makes them an efficient and very agile option to carry out your sales or rental procedures safely.

Property News has a new and innovative platform where you can make online appraisals. It is a simple process that you can do from the comfort of your home or office. In addition, it responds to the changes and challenges of today’s digital world and is up to date with the transformations in the real estate market.

If you have any doubts in this regard, then we will tell you how to carry out the online appraisal of your property through our platform.