In the context of an inheritance, in case of divorce,
for the re-evaluation of a bank loan, or if you wish to obtain a
mortgage loan to purchase the property of your dreams, you
may need to obtain a market value appraisal of the property
concerned.
Often confused with property valuation, a market value appraisal is actually quite different. What does it involve? When should you resort to it? Who should you contact to perform it? We explain everything in this new article!
Property Valuation
Before listing an apartment, a house, or
any other type of property for sale, the seller will need to determine a fair and
appropriate selling price. If the determined price is too high, the property will beless attractive to potential buyers, and the sales period risksbeing prolonged. This situation is often caused by a lack of objectivity on
the part of the seller, who will generally be influenced by a strong emotional bond
to their own property. Conversely, if the property is
undervalued, often due to a lack of market knowledge, the risk of
losing money is very real.
Fortunately, many real estate agencies
offer to provide a free valuation of your property. The real estate
agent responsible for the task analyzes your property, its composition, its
condition, and its location. Often, they do not provide you with a precise price or
a written report, but rather a price range that will allow you to list
your property for sale.
Please note that although performed by professionals, it is not uncommon for two price valuations to be very different. To avoid this inconvenience, we advise you to entrust the valuation of your property to a real estate agency located in your neighborhood, which therefore benefits from a perfect knowledge of the local market.
Real Estate Market Value Appraisal
Unlike a property valuation, which is a
commercial assessment of your property, a market value appraisal involves a
much more detailed and in-depth analysis of the property to obtain a precise
selling price. Indeed, the expert’s report precisely describes the
property and its configuration, and also includes notes on the
building’s structure and condition.
In reality, in the context of a standard valuation, the real estate agent’s objective is to secure the sales mandate for your property in order to sell it at the best price. For a market value appraisal, the real estate expert performing the appraisal is completely independent and does not act on behalf of a real estate agency. Furthermore, they are remunerated per assignment, and their fee can only increase or decrease based on the size of the property to be appraised.
Accredited Market Value Appraisal
In comparison to a simple market value appraisal, an
accredited appraisal, on the other hand, can only be performed by an expert accredited by
the mandating institution. These experts are generally real estate agents,
surveyors, or architects, and have supplemented their professional knowledge
with a specific university course to obtain their accreditation.
Mandated by the court, a judge, a notary, or a
bank, the expert’s mission is therefore to assess the
as preciselyvalue of a property as possible. Unlike a classic market
value appraisal, which informs owners of property prices, an
accredited market value appraisal binds the stakeholders, who must
adhere to the estimated selling price.
Please note, however, that the profession of real estate expert is not strictly regulated. If you find yourself in a situation requiring an accredited market value appraisal, the mandating organization will engage an expert from its own list. The individual therefore has no say in the choice of expert.
When to Request a Market Value Appraisal?
Here is a non-exhaustive list of cases in which a
market value appraisal is often necessary:
- Before Buying or Selling: Whether you are preparing
to buy or sell, you will sometimes need a detailed appraisal of the
property in question to better determine its value or to
reassure yourself about its condition.
- For an Inheritance or to Receive a
Donation: Depending on your degree of kinship with the owner of the property
concerned, you will have to pay inheritance/donation taxes, which
will be calculated as a percentage of the building’s value. A fairand realistic appraisal is therefore, most of the time, mandated by the notary. In
this case, an accredited market value appraisal will be necessary.
- Before Taking Out a Mortgage or in Case of
Bank Loan Re-evaluation: The bank or lending institution
will generally want to know the real value of the property you
wish to acquire, in order to limit any risk in case of non-payment of your
bank loan and thus forced resale of the property. In this situation, it is
the bank that mandates an independent expert to perform the
accredited market value appraisal.
- To Exit a Joint Ownership: In case of an inheritance to be
shared or a divorce, for example, each co-owner of the property wishes to
obtain the most advantageous sum. The intervention of a neutral and
objective expert generally helps to find the fairest agreement.
Our Advice for your Market Value Appraisal
Do you need a market value appraisal in the context of an inheritance or a divorce? Consult your notary or lawyer so that they can recommend an expert accredited by their firm. You will then be certain to obtain a high-quality appraisal for the property concerned!
Do you have questions or need to perform a market value appraisal of your property? Please do not hesitate to contact us. Amaury Hermanns, an independent expert accredited by the Justice system and founder of our real estate agency, is at your disposal and will be able to guide you through these procedures.
