Who pays for the appraisal of an apartment or house when buying with a mortgage?

Why do you need an apartment appraisal?

There are several cases when it makes sense to estimate the value of your own or purchased home. If a person is going to sell an apartment, but is not familiar with the market, then a professional expert’s opinion will help him orient himself and not make a mistake with the transaction. This document can also be used as a kind of “advertising booklet” for buyers to justify the value of the property for sale. In this case, the seller pays for the apartment appraisal service. Whether or not to order this examination is a voluntary decision. According to the law, when registering real estate purchase and sale transactions without credit funds, an apartment appraisal is not required.

If you plan to purchase an apartment with a mortgage, then the appraisal is a necessary document to obtain a loan. This is regulated by the Federal Law of the Russian Federation “On Mortgage”.

Expertise is needed, first of all, by the bank, because it makes the decision on exactly what amount to issue to the borrower. In addition to studying the client’s personal documents and his trustworthiness, it is also necessary to understand the real need of this client for money. On the other hand, by receiving a report on the assessment of real estate, a house or an apartment, the bank has additional guarantees that if problems arise with repaying the loan in the future, the apartment can be sold on the open market for reasonable money, even at a discount.

Each financial organization has its own operating standards, but the general tendency is that banks start from the lower limit of the appraised value of the apartment, subtract from it the amount of the required down payment and thus form the body of the loan.

But you need to understand that if the borrower does not have a sufficient level of confirmed income, then the bank will reduce the loan amount anyway. In this case, the borrower will either have to look for additional funds to increase the down payment, or select another property.

House valuation for the bank

Content:

• Home Value Estimation
• The main reason to call an Appraiser may be the following:
• In addition to the report, OK "VIK" LLC can offer you an opinion on the cost.
• Home evaluation criteria
• Below are the most cleared areas of the Moscow Region:
• House valuation price
• What documents will be required?

Home Value Estimation

Estimating the value of a house is a procedure necessary to accompany any actions with a property. The assessment report will reflect the market value, which will help you complete a purchase transaction, obtain a loan, enter into an inheritance, or simply competently put your property up for auction.

The main reason to call an Appraiser may be the following:

• Division of property for the court
• Purchase
• Investments
• Getting insurance
• Credit

In addition to the report, Appraiser can offer you a cost estimate.

Conclusion is an informational certificate that includes only the final cost and calculations. Does not have the status of an official legal document.

Assessment report is a document drawn up in accordance with Federal Law 135 on assessment, FSO 1,2,3,7. It has the status of a legal document.

Home evaluation criteria

• Size/Area
• The prestige of the district of the Moscow region. It's no secret that the west of the Moscow region is always the most environmentally friendly and green direction. That is why the “market house market” there is many times different from other areas.
• Communications. Of course, the presence of gas, especially if it is installed and piped into the house, will significantly affect the price of the house.
• Eco-logical.

Below are the most cleared areas of the Moscow Region:

It is fashionable to include Ruzsky and Mozhaisky in the first group, and Shakhovskoy and Lotoshinsky from the north-west.

The second group includes Volokolamsk, Serebryano-Prudsky, Taldomsky and Yegoryevsky districts.

The third group includes Odintsovo district.

Advantages

The shortest possible time for independent assessment

Highest quality independent assessment

Individual approach to assessing each case

Our certificates

House valuation price

What documents will be required?

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Olga Anatolyevna June 26, 2021, 17:01 We ordered an assessment of damage from the flood of an apartment in a new building for the court. We quickly collected all the data, prepared a report and assessed the damage. We won the case. Thank you

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Do you need an appraisal when buying an apartment from a developer?

When it comes to buying an apartment in a new building, a reasonable question arises as to why an appraisal is needed if the cost is set by the developer and fixed in the contract. The fact is that the bank does not have the right to violate the law “On Mortgages,” which clearly states the need to conduct this examination. Therefore, you will still have to order an independent assessment. To some extent, this will be insurance for the buyer; the expert will check how fair the price for the selected property is. And if it differs greatly from the contract price, it makes sense to think about the feasibility of such a transaction. The assessment of a new building is carried out at the time of delivery of finished housing.

How is an apartment appraised with a mortgage?

First of all, it is worth considering that the apartment is assessed when the housing has been finally selected and there is an agreement with the seller. In order for the property to be assessed for a mortgage, the borrower must collect the necessary documents.

It includes:

1. Legal documents. Most often this is a copy of the certificate of ownership of the apartment, or a copy of the purchase and sale agreement. If a mortgage is issued for part of the living space, then a copy of the share participation agreement is provided.
2. BTI plans, including an explication of the apartment - a document that has a detailed description of the entire area, indicating the exact dimensions and floor plan. According to the available plans, the appraiser checks the identity of the real and documented real estate plan. If during the reconciliation it is discovered that the housing has been redeveloped, it will be required to be registered. Otherwise, the bank will refuse to issue a loan.
3. A copy of the cadastral passport. This document is issued by the BTI to the owner of the property.
4. A certificate stating that the house is not included in the plans for demolition (not necessary for a new building).
5. If a mortgage is issued for living space in a house built before 1960, a certificate of floor coverings will be required. The fact is that old houses have wooden floors, which are subject to a greater fire hazard. Because of this, insurance companies refuse to cooperate with the bank, fearing increased risks in the occurrence of an insured event. In this connection, the mortgage cannot be issued, because there is no insurance agreement.
6. A copy of your passport and contact details.

When all the necessary documents have been collected, the borrower must contact the appraisal company and agree on the place and time of the examination. On the appointed day, the appraiser goes to the site, where he carries out a certain sequence of actions, the result of which is a report - an assessment of the subject of the mortgage.

Who does the real estate appraisal?

In Russia there are many independent appraisers and companies that provide this service. But, despite the fact that there is fair competition between them, banks partially influence the choice. The fact is that each bank has a list of accredited companies whose reports they accept more readily. Appraisers fight among themselves both for the client and for the location of financial institutions. On the one hand, they must satisfy the direct customer - the buyer of the apartment, namely, indicate in the report the required amount to obtain a loan, but on the other hand, they must remain objective and independent.

So, before ordering an examination of the apartment you are purchasing, ask your financial institution for the list and contacts of accredited appraisal bureaus. Otherwise, the procedure will have to be repeated, paying for it again. The bank has no right to impose an appraisal company; it can only recommend a list of those it trusts. The worst thing that can happen if the borrower provides a report from his own appraiser is that the appraisal may take longer, and during this time the loan approval period will expire. Therefore, it is still better not to take risks.

On the issue of price - there is no single tariff for this type of service; the cost ranges from 2 to 5 thousand rubles. If the property is complex, for example, it has undergone redevelopment or is not standard (a house built according to an individual project), then the assessment will cost more and take longer.

Components of the assessment

When inspecting a property, the appraiser pays attention to many factors that ultimately add up to a certain picture of the final value.

When taking into account the price, much attention is paid to the documents for the real estate.

The appraised value of the property will directly influence your mortgage decision.

Experts recommend preparing all kinds of papers that you have before the assessment. This will provide objective information, and for the borrower will increase the chance that the appraised price will be as high as possible.

If we talk about other factors, then the following will be of great importance:

• date of construction of the premises, its general and technical condition;
• infrastructure: how far is school, kindergartens, shops, transport interchanges, pharmacies, bus stops and much more;
• the location of the immovable property and other objects in relation to them;
• condition of the apartment: renovation, communications, window exits, size of rooms;
• assessment of factors affecting human health: nearby thermal power plants, factories;
• documentation for the real estate.

After studying all these factors, the appraiser determines the cost of the apartment.

It will be useful for the future borrower to know that there are two types of established prices: real and liquid.

The real one is how much your apartment costs. Liquidity – how much they will be willing to buy your apartment for urgently.

When calculating the liquid price, the bank takes into account 80-90% of the price of your apartment. Under these conditions, it is believed that the apartment will be bought quickly enough. Thus, the bank insures itself when issuing a mortgage to a future client.

You might be interested in an article about how to get a mortgage.

Read the article about applying for a mortgage without a down payment here.

What does an appraiser do?

In fact, the apartment appraisal report is a rather large and detailed document. It is drawn up in a unified format in accordance with the Federal Law “On Valuation Activities”. It describes not only the apartment, but also gives a more general idea of ​​the economic situation in the area, the real estate market, and also studies in detail the area in which the apartment is located, its infrastructure, attractiveness for purchasing housing and many other factors influencing the final price. Most of the report is occupied by data on the property itself. It contains photos of the living space, entrance, elevators and courtyard. In this case, the expert is obliged to independently go to the site to verify the authenticity of the photographs and the condition of the apartment. A special place in this report is given to a description of the calculation methodology, formulas and the cost calculation itself. At the same time, as a result of the examination, the appraiser forms two prices for a residential property - market and liquid.

The apartment appraisal report for a mortgage is valid for 6 months; if during this time the buyer did not have time to apply for a loan, he will have to order a second examination, and the price may already change.

Apartment appraisal report for mortgage

The result of contacting an appraisal company will be to receive a report on the appraisal of the apartment for a mortgage. It describes in detail the property being assessed and how its value is calculated. At the end of the document, the appraiser makes a conclusion about the price of the property at the time of the inspection.

Recommended article: Documents from the seller for a mortgage

Photographs and copies of documents for the apartment are attached to the text part of the assessment report. Please note that the appraiser who carried out the work must sign and stamp the document. The finished report is bound and stitched.

Attention! The evaluation report is valid for 6 months. If you did not manage to get a mortgage during this period, you will have to order the document again.

When calculating, specialists can use the following methods:

1. Comparative. The appraiser compares the value of already completed and proposed transactions with similar apartments, and draws conclusions on this basis. This approach is used to evaluate an apartment.
2. Expensive. The costs of constructing such housing are analyzed. Often used to evaluate newly constructed buildings.
3. Profitable. The possibility of increasing the value of this property is taken into account. As a rule, this approach is used when assessing commercial space, the purpose of which is to make a profit.

The appraised value of an apartment is influenced by several factors:

• location area;
• technical parameters of the house (year of construction, materials, availability of parking spaces in the yard, proximity to a bus stop, school, kindergarten, maintenance of the entrance, etc.);
• condition of the living space (repair, double glazing, flooring, etc.), floor, how many rooms;
• price for similar apartments.

If you want a specific value in the appraisal report, don't hesitate to express it to the appraiser. He can meet halfway and apply increased coefficients if the apartment has been well renovated, new windows, doors, etc. have been installed. The fact is that the estimated value can be set in a certain range. Small price fluctuations do not have a serious meaning for the bank and the appraiser.

In whose interests does the apartment appraiser act during a mortgage?

The main principle of attracting third-party companies to conduct a comprehensive assessment of real estate is the independence of their opinion. The bank and the borrower are to some extent parties with opposing interests. On the one hand, the financial institution seeks to value the property as low as possible in order to sell it for a greater profit if something happens. The buyer, on the contrary, is often interested in the maximum possible loan amount. That is why the assessment process is considered an independent examination, despite the fact that it is paid for by the buyer of the apartment.

Is it possible to negotiate with an appraiser to inflate the value of an object?

This question may arise from a buyer when he needs to get more money from the bank than the actual cost of the apartment. This happens when the down payment is not enough, or there is a desire to immediately repair the purchased home using loan funds. Whether it will be possible to reach an agreement with the appraiser depends on how much he values ​​his reputation. After all, having once caught him in providing false information, the bank will most likely stop cooperation in the future. Therefore, if you manage to find an expert who promises to put any necessary numbers in his report, it is better to inquire in advance whether the bank where you are planning to receive a loan accepts these reports.