When is a house and site assessment required?
An appraisal of the house and plot is required to establish the market value of the property. When concluding a purchase and sale transaction, the procedure is carried out on a voluntary basis.
The involvement of an appraiser is provided for by law in the following cases:
- Registration of inheritance. It is necessary to determine the value of the home so that the notary’s office can issue a certificate confirming the right to dispose of the property.
- Bank deposit. A credit institution does not issue money without formalizing an encumbrance. To do this, you need an expert opinion on the value of the property.
- Real estate insurance. To calculate the amount of insurance, it is necessary to obtain data on the value of the property for which the insurance policy is issued.
- Damage assessment. The amount of the amount for repair work is determined.
- Drawing up a gift agreement. The amount of the state duty depends on the value of the property.
- Valuation of a house for trial. In case of divorce or disputes between heirs, determining the value of real estate helps resolve property disputes.
IMPORTANT! The assessment of a residential building is carried out to calculate contributions to the authorized capital of the enterprise. The founders have the right to contribute money or transfer personal property to the company.
Why do you need an accredited expert?
Banks only accept reports from accredited appraisers. This means that they have the right to engage in appraisal activities, are members of the Russian Society of Appraisers, and their professional liability is insured.
The land plot assessment report is accepted for mortgages by Sberbank, Alfa-Bank, Gazprombank, as well as other financial institutions, a complete list of which can be obtained from consultants. It fully complies with the requirements of these financial institutions and takes into account all mandatory factors.
The expert inspects the land plot, photographs it, then, after completing the paperwork, prepares an official report. The procedure takes 1-3 days. The cost of services is calculated according to the standard tariff. The company has been present in the real estate market for more than 15 years and during this time has conducted more than a thousand examinations for private clients, manufacturing and trading enterprises from all over Russia.
Who has the right to evaluate a house and land plot?
Independent specialists - persons licensed to conduct expert activities - have the right to evaluate a house. Appraisers are members of the SRO and have a civil liability insurance policy in the amount of at least 300 thousand rubles.
Property owners choose an expert on their own, taking into account prices for services, reputation and other parameters. However, lending institutions refer borrowers to certain appraisers when issuing a mortgage loan.
ADVICE! SROs that cooperate with credit institutions draw up a report in accordance with the requirements of the bank. This eliminates the risk of sending the document for revision or re-registration.
The procedure for assessing a house with land
The procedure for assessing a country house consists of a number of stages. The home owner negotiates the terms of cooperation with the appraiser and sets deadlines for the examination. A corresponding agreement is drawn up.
After signing the contract, the owner of the property gives the expert the documentation for the house and agrees on the date of the specialist’s visit. During the inspection process, the appraiser takes photographs of the housing and inspects the building for illegal redevelopment.
An independent assessment of the house and site is carried out based on one of the methods:
- Analog. The essence of the examination is to compare prices for such transactions throughout the year. Based on the results of the analysis, the appraiser identifies the value of the current object. This technique is used in large populated areas.
- Expensive. A special feature of the methodology is the assessment of expenses incurred by the homeowner during repair and construction work. Cost expertise is used to establish the cost of country cottages.
- Profitable. Used to evaluate city apartments and commercial real estate. Market value is determined by assessing the return on investment in real estate.
When examining a private house and plot, the appraiser pays attention to the following parameters:
- Location of the property (infrastructure development, type of settlement, etc.).
- Condition of the building (year of construction, number of floors, area, type of building materials, condition of communications).
- The presence of encumbrances on the site and dacha.
ATTENTION! If the property being sold was purchased using borrowed funds and the loan is not repaid, the owner needs to remove the encumbrance from the house and order an updated extract from the Unified State Register.
The validity period of the report for housing purchased with a mortgage is six months. If not only a house, but also a plot of land was purchased on credit, an additional assessment of the land is required.
What documents need to be provided
To determine the value of a home, the following documentation is required:
- A duplicate of the identity card and TIN of the owner of the property.
- Cadastral passport and topographic plan of the site.
- A document confirming ownership of the house.
When purchasing housing in a building under construction, an agreement with the developer is required.
In what cases is a home assessment necessary - review of the TOP 7 main situations
In this section, we will take a closer look at situations when you need to appraise a house.
Situation 1. Registration of inheritance rights
A house assessment for inheritance is carried out in order to calculate the notary fee, determine the amount of land tax and state duty, and resolve a property dispute between the heirs.
To evaluate a house, you need documents from the BTI, documents confirming the ownership and status of the house, the encumbrances placed on it, and the customer’s passport.
If, along with a private house, a plot of land in the area adjacent to the house is also inherited, then the valuation of the land will also be added to the valuation of the house. Documents for an independent cadastral assessment of the value of a residential building will require a site map, geodesy, documents on the status of the land and communications.
Please note that if we are talking about inheritance, the procedure for assessing a country house for the court will be different. The reason is that, according to the law, dachas have a special legal status that differs from residential real estate.
A dacha is considered an entire property complex, which includes a plot, a house, additional buildings (sheds, sheds), and green spaces (see the article “Property Valuation”).
Situation 2. Conclusion of a purchase and sale agreement
The assessment of a residential building when concluding a purchase and sale agreement is usually carried out at the stage of preliminary negotiations. In this case, the parties jointly select an appraiser.
Often a home appraisal is carried out before selling to confirm the sale to third parties. Interested parties may be the company's shareholders, the tax service, and higher organizations.
For tax authorities, an assessment is proof of the correctness and completeness of tax assessment. Please note that if the tax office has questions after the fact of concluding a purchase and sale transaction, the appraiser’s report will add significance to your argument.
The appraiser's candidacy must be agreed upon and satisfy both the buyer and the seller. The appraiser's payment should not depend on the result of the assessment; it is agreed upon in advance and fixed in the contract.
Evaluation report
The real estate inspection report is prepared in writing. The pages are numbered, the report is stapled, certified with a stamp and signature of the SRO representative. The report averages thirty pages.
The document contains the following information:
- information about the expert and the customer;
- information about methods for assessing housing;
- information about the house being inspected;
- real estate market analysis;
- identification of the market value of the object.
The report for the bank when applying for a mortgage loan contains:
- documentation for housing;
- photographs taken during the examination process;
- market price of real estate;
- liquidation value (the amount for which the bank will be able to sell the house if the borrower fails to fulfill its obligations).
If the bank client independently chose an appraisal company, additionally the following should be attached to the report:
- Diploma in Evaluation;
- document confirming membership in the SRO;
- civil liability insurance policy.
ADVICE! The assessment customer needs to carefully study the expert’s completed report while in the company’s office. This will help you quickly resolve possible issues and understand the nuances.
Valuation of land for mortgage
When making a mortgage on a land plot, an assessment of its market value is a prerequisite. A report on this procedure is included in the package of mandatory documents that the bank will require.
What is a land assessment for a mortgage?
An appraisal of the plot for a mortgage is necessary in order to obtain permission from the bank for a mortgage loan.
Mortgage appraisal is the process of calculating the market and liquidation values of a land plot, on the basis of which the bank will determine the size of the loan.
In the case of mortgage lending, the bank needs collateral to guarantee the fulfillment of obligations under the agreement. This collateral must be equal to or greater than the loan amount. This is due to the fact that in the event of termination of the contract, the bank must be able to sell the property to cover all its losses, and you will not be left in debt.
In this case, the bank does not care at all about the price of the purchase and sale transaction, which is specified in the contract.
How is a site assessed for a mortgage?
In his work, the appraiser takes into account many factors that influence the value of a piece of land:
- Location
- Square
- Transport accessibility
- Infrastructure
- Permitted use
- Relief
- Availability of buildings and much more.
When conducting an assessment, the appraiser determines the possibility of using one or another assessment method. This depends on the physical characteristics of the property being assessed and its position in the market.
Therefore, the specialist uses all possible information about the purchase and sale of similar land plots and existing offers on the market, analyzes the information received using the comparative valuation method .
As the work progresses, it becomes clear whether it is worth limiting ourselves to this approach or whether it is necessary to use additional methods.
Important:
When you contact an appraiser, be sure to inform him of the purpose of the appraisal and better specify which bank you will have mortgage lending with. Appraisers who specialize specifically in real estate valuation, as a rule, are aware of the additional reporting requirements of a particular bank.
What does the client get?
As a result of the appraiser’s work, the client will have a report on the market value of the property, which he can submit to the bank for mortgage approval. Understanding that buying and selling real estate is not the fastest process, valuation reports have a validity period of 6 months.
Each report, completed in accordance with all requirements of the Law “On Valuation Activities” and standards, has full legal force. He will be accepted in the bank, in court, and in the guardianship authorities.
The assessment report includes sections:
- Information about the Appraiser and the Customer
- Characteristics of the subject of assessment
- Review and analysis of the real estate market
- Analysis of object liquidity
- Rationale for the assessment methodology
- Determination of market value
- Determination of liquidation value
- Appraiser's documents: Diploma, Certificate of membership in SRO, Extract from the SRO register, Compulsory appraiser liability insurance policy
- Company documents: OGRN, INN/KPP, Insurance policy
- Customer documents: title and technical documentation for the facility
- Photos of the object
What can the assessed value affect?
The SRO expert’s report affects the following lending conditions:
- size of the amount;
- loan term;
- interest rate.
If the real value of the property, as determined by the appraiser, is lower than the market value, the bank does not issue the required amount. In such a situation, the borrower needs to:
- request a re-examination;
- conduct an assessment in another company;
- apply for a consumer loan for the missing amount.
It takes three to five days to complete an appraisal and report on real estate purchased with borrowed funds.
