The word appraisal defines the action of assigning value to an object, it is a kind of document prepared by a trained professional, where it justifiably establishes the value of an asset, in accordance with previously stipulated principles and developing an appropriate methodology to the proposed objective. In the real estate field, appraisal is defined as the report aimed at specifying the value of a property within the market, in relation to supply and demand at a given time.
The appraisal of a property must meet certain legal standards, in order to be able to specify the criteria and methodology to carry it out, thus assigning validity to the appraisal value that is calculated.
When an individual wishes to request a loan from the bank, and places a property as collateral, normally the bank wants to know the value of said asset, therefore it requires that a report be delivered with the valuation of said property, in this case it would be speaking of a mortgage appraisal, this report is prepared by an architect, who must also be a member of a property appraisal society, registered with the housing ministry. The purpose of the mortgage appraisal is to serve as collateral for the mortgage loan.
Among the factors that influence the appraisal value of a property are: the location, the closest public services (schools, supermarkets, hospitals, recreational areas, etc.), the quality of the materials with which the house was built, antiquity.
Similarly, there are various methods that are used when calculating the value of a good in the market, these are:
Comparison method, is the one that is used the most, and consists of valuing the good by comparing it with others of the same characteristic and value.
Residual method, when the calculation by comparison is impossible, since it was not possible to locate properties with similar characteristics, then the residual method is used, this consists of calculating the value of the property with which the construction would have once ready and deducting the expenses those that must be incurred for the home to reach that state.
Capitalization method, when the property is capable of generating income, and its price can be logically estimated, then the capitalization method is used. In this case, the value of the property is calculated through the update to the appraisal date of all the net income that the property will produce through economic formulas.
