How are residential mortgage valuations undertaken in Spain?
By law residential mortgage valuations in Spain have to be undertaken by a valuer working for a specialist valuation company. The companies that undertake mortgage valuations in Spain are known as Sociedades de Tasación (Mortgage Valuation Companies) and the people that undertake the valuations are called Tasadores (Property Valuers). They are subject to very strict controls by the Bank of Spain.
The valuation companies are not permitted to undertake property agency functions at all in order to avoid potential conflicts of interest. This is very different from the UK for example, where valuation companies and estate agents can be in the hands of one owner.
As in the UK, the process starts with an inspection of the property. During the inspection the tasador will measure the property, look for any defects and make an assessment of the location. He or she will normally then return to the office to undertake the market research and calculation of value. As in the UK market comparables will be used to arrive at an opinion of value.
Spanish mortgage valuation reports normally include a table of weighted asking price or achieved sale price comparables.
Part of the tasadors job is to consider which of the available market comparables in his or her possession are the most relevant and use this to calculate the value of the property. The valuer may apply confirmed sales data to calculate the value, if he is fortunate enough to have access to such information. In such cases it is normally only necessary to include three comparable transactions in the report. Otherwise the tasador will rely on asking prices and make adjustments to allow for the negotiation process.
Spanish valuation reports are not especially user friendly. They are long and confusing to the untrained eye, with many tables, coefficients with little explanatory text. The reported opinion of value is known as a tasación.