How to make a real estate appraisal using a mortgage

Appraising an apartment for a mortgage is a mandatory step on the path to purchasing your own home. The expert told FAN, what future owners need to do to get through this stage.

Today, a mortgage for Russians is one of the main ways to purchase their own home. Simply saving up for a down payment, choosing your dream apartment and contacting the bank offering the most favorable interest rate will not be enough. On the way to achieving your cherished goal you will have to go through several stages. One of the most important is the valuation of real estate for a mortgage. We talked with the head of the mortgage lending development department of Raiffeisen Bank, Anton Krasilnikov , and found out what this procedure is, who carries it out and what documents are required.

What is an apartment appraisal and why does the bank need it?

Anton Krasilnikov: “Before conducting a mortgage transaction, a real estate assessment is mandatory. This is the requirement of the law. It is due to the fact that a mortgage is a substantial amount of money that the bank lends to the client for a long period of time. Repayment of the debt in this case is guaranteed by collateral of the purchased real estate. The bank needs to know the market value of the property, because if the borrower is unable to regularly make monthly payments, the lender, in order to avoid losses, will be forced to sell the mortgaged property at auction.”

From the client’s point of view, an objective assessment makes it possible to understand whether the object that you like is worth the money.

Who are the judges?

Having understood the essence of the assessment, you can move on to the question of who is conducting this necessary event, and decide “at whose expense the banquet will be paid.” Our expert says that the procedure can be carried out either by the bank itself or by an independent appraiser. In the first case, the service will be provided free of charge to the client.

“The bank undertakes assessment obligations when, for example, it is not intended to issue a mortgage for the transaction. An independent assessment is indispensable when taking out a mortgage, and it is done in most cases. It is done by an appraiser who meets certain requirements. For example, he is a member of one of the self-regulatory organizations and has a qualification certificate with permitted areas of assessment.”

In other situations, the borrower will have to pay for the appraiser's work. The final amount depends on the type of object (apartment, share in it, private house, commercial or non-residential real estate), the region in which it is located, the area and location of the object itself, and additional services provided by the appraiser.

Basically, the bank accepts reports from those companies that have passed the accreditation procedure and inspire confidence in the lender. Despite the fact that, by law, banks must accept results from any company chosen by the borrower, experts still recommend using the services of trusted appraisers, since their database is quite large. This will save you from unnecessary hassle with complaints about an incorrect evaluation album and save your time.

The activities of appraisers are regulated by the relevant federal law “On appraisal activities in the Russian Federation.” Before giving preference to one or another organization, it makes sense to call several of the list that they will give you at the bank and find out how quickly it is possible to go to the site (standard - 1-2 days), how long it will take to prepare the documents (usually , a little less than a week) and approximately how much you have to pay.

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Mortgage appraisal cost

The potential borrower pays for the services of a specialist. The cost of assessing the mortgage of an apartment or house depends not only on the type of property, but also on the city in which the mortgage loan is issued. In Moscow, the price of an expert opinion is usually higher than in other Russian cities.

So, a specialist’s opinion on how much an apartment or house costs on the market today is necessary for the bank to make a decision on the amount of the loan issued. In addition, the examination guarantees the liquidity of the mortgaged item, which is important for both the borrower and the lender. Start drawing up a mortgage agreement with the correct assessment together with Rosbank Dom Bank.

How is the assessment carried out?

The entire process is regulated by law, which regulates standard approaches and describes the procedure in accordance with different situations. Anton Krasilnikov explains that there are three methods for assessing real estate, depending on how the property is intended to be used:

“To evaluate commercial or residential real estate that is purchased for subsequent rental, an income approach is used; for a private house under construction, a cost approach is used. In both cases, an analysis of similar real estate objects and cash flows for them is carried out. Such techniques are quite expensive and are therefore rarely used.”

A much more common and simpler method is the comparative one. The appraiser’s tasks include selecting similar properties, comparing costs and directly drawing up a report. However, it should be understood that the formation of a comparative price is not only about identifying the arithmetic average. The area in which the property is located, its environmental friendliness, the degree of development of nearby social infrastructure, distance from the metro and public transport stops, technical and other characteristics of the building (number of floors, year of construction, material, major repairs carried out, presence of an elevator and garbage chute, concierge, etc.) are also taken into account. condition of the entrance, presence/absence of parking spaces, etc.), condition of the purchased apartment itself (floor, number of rooms, area, renovation, balcony), various adjustments are applied. When purchasing an apartment in a new building, the degree of readiness of the house, the presence or absence of internal partitions and finishing are also taken into account.

If the property does not have any outstanding features that greatly distinguish it from similar offers, then the assessment will take a day or two. If the object is atypical, then compiling a report may take a whole week.

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Property valuation

One of the essential conditions for transactions with a residential building, apartment, commercial premises or land is the market value of the object. Experienced expert appraisers of ANO SOYUZEXPERTIZA conduct real estate appraisals in Moscow for any purpose. We guarantee a professional approach, objectivity and accuracy of calculations, impeccable quality of services provided, optimal options for solving the tasks set by the client.

Real estate valuation is the determination of the market value of an object. In a broad sense, this activity includes the assessment of property rights, taking into account existing encumbrances, easements, etc. It is carried out by specialized organizations and is regulated by Federal Law No. 135-FZ of July 29, 1998 “On Valuation Activities in the Russian Federation.” In accordance with regulatory legal acts, determining the value of an object can be carried out both voluntarily and mandatory. The law establishes cases when mandatory real estate valuation is required. These include the alienation of real estate owned in whole or in part by the Russian Federation, a constituent entity of the Russian Federation or a municipal entity.

The Civil Code of the Russian Federation classifies as real estate land plots and objects firmly connected with them, the movement of which is impossible without disproportionate damage to their purpose:

building;
buildings;
structures;
land plots directly;
subsoil areas;
inland navigation vessels, sea vessels and aircraft subject to state registration;
space objects.

Factors determining the market value of the property subject to assessment:

location: district, floor;
year of construction of the building (structure, structure);
technical characteristics of the object: area, layout, etc.;
material of walls, roofing, ceilings, quality of finishing;
infrastructure;
the nature of the surrounding buildings;
transport connection;
presence (absence) of encumbrances and arrests.

Why do you need a real estate appraisal?

The real estate market in our country is actively developing. This contributes to increased demand for appraisal services. Thus, an assessment of the value of real estate made by an independent appraiser allows one to obtain objective and most reliable information about the price of the property. Today, appraisal services are in demand in the following situations:

carrying out transactions of purchase and sale, division, allotment of shares, exchange, donation, redemption of state or municipal property, registration of rent;
entry into inheritance rights;
mortgage registration;
resolution of property disputes;
privatization, insurance of real estate, including through the transformation of enterprises into joint-stock companies;
redistribution of property shares;
issue of securities;
attracting new business participants;
making a contribution to the authorized capital;
revaluation of assets;
transfer of the object to trust management;
assessment of the market value of real estate for tax purposes;
assignment of obligations under transactions;
calculation of the wear and tear of buildings, structures and structures;
development and implementation of construction, reconstruction, re-equipment and liquidation projects;
drawing up business plans and making other decisions on the commercial use of real estate.

Procedure and features of real estate valuation

The valuation of real estate is carried out in the following order:

Submitting an application for assessment work to the expert assessment organization. Legal and technical documents must be attached to it. The application may be submitted by the owner, another legal owner or a person authorized by him (based on a power of attorney).
Carrying out appraisal work: an expert appraiser visits the site, collects the necessary information, takes photographs, analyzes and processes the received data.
Drawing up and issuing a real estate assessment report to the customer.

The timing of the work is determined by agreement of the parties and is fixed in the contract.

Real estate valuation objects

ANO "SOYUZEXPERTIZA" evaluates the following real estate objects:

residential multi-apartment and individual houses, apartments, rooms, garden houses;
commercial real estate: buildings and premises for industrial, commercial, cultural, entertainment, health, office purposes, as well as facilities intended for sports, tourism and hotel business;
land plots, forests, water bodies;
Construction in progress.

We assess the value of real estate owned, leased, perpetual (fixed-term) use or lifetime inheritable possession.

List of documents required for real estate valuation

To carry out appraisal work, you will need documents confirming the rights to the object being assessed, as well as its technical characteristics.

List of documents for apartment evaluation:

applicant's passport, contact information: residential address, phone number;
registration certificate for the apartment or title document (sale and purchase agreement, exchange, rent, donation, lease, privatization, etc.);
certificate from technical inventory authorities in form 11a (validity period – 1 month from the date of issue);
BTI technical passport (floor plan and explication).

List of documents for assessing a country (garden) house, country house, cottage:

property registration certificate or title document for real estate;
technical passport (floor plan with explanation);
documents for the land plot.

List of documents required for assessing a residential building:

passport of the copyright holder;
title documents, if available – certificate of state registration of rights;
documents of technical inventory authorities (floor plan and explication);
extracts from the Unified State Register of Encumbrances on the presence (absence) of encumbrances, including collateral, debt obligations, and tenant rights;
documents on existing agreements, contracts, special tax regimes and other restrictions on use;
a plan of the boundaries of the land plot on which the assessed object is located;
title documents for the land plot (decrees, certificates of ownership, lease agreements, etc.);
information about structures within the facility, ancillary buildings, utility networks, infrastructure;
if the valued object contains movable property - the necessary information about its volume, quantity, technical parameters and physical characteristics.

To evaluate commercial real estate you will need to provide:

passport of the copyright holder - for individuals, constituent documents, protocol on the election (decision on appointment) of the head, his passport details - for organizations;
title documents for the object (if available - registration certificate);
BTI technical documentation;
extracts from the Unified State Register on the presence or absence of arrests and encumbrances;
a plan of the boundaries of the land plot indicating its location and description;
title documentation for the land plot (certificate of ownership, perpetual (fixed-term use), lifelong possession, lease agreement, resolution, purchase and sale agreement, etc.);
technical information about structures, as well as about movable property (if any) as part of the assessed object.

To carry out appraisal work in relation to land plots, you must provide:

passport details of the applicant (for legal entities – registration documents);
documents confirming the right to a land plot: purchase and sale agreement, privatization, lease, donation, certificate of inheritance, etc.;
boundary plan;
cadastral passport of the land plot;
documents determining the rate of rent or land tax.

List of documents that will be required to evaluate the building:

information about the applicant: for a legal entity – registration documents, protocol or decision confirming the authority of the manager, his passport details; for an individual – passport;
title documents for the property subject to assessment, indicating the exact location, type of right and copyright holder;
information about the presence (absence) of encumbrances, including collateral, debt obligations, rights of tenants, agreements, contracts, special taxes and other restrictions on the use of real estate;
a geodetic plan or map indicating and describing the location of the land plot under the property being valued;
title documents for land (certificate of ownership, lease agreement, etc.);
cadastral passport of the land plot;
information about the available movable property as part of the property being valued;
BTI registration certificate for the building;
other technical documents (design and estimate documentation for construction, reconstruction, technical specifications, explanatory notes, etc.);
a certificate issued by the accounting department of the enterprise on the book value of the building (if the object is owned by a legal entity).

List of documents required for carrying out assessment work in relation to structures:

for individuals - a passport, for organizations - certificates of OGRN, TIN, protocol on the election (decision on appointment) of a manager, his passport details;
copies of inventory cards for objects and transfer devices. They must contain the following information: date of commissioning, inventory number, norms and code of depreciation charges, initial cost excluding denominations (as of the date of commissioning of the facility);
accounting certificate on the book value of the structure and transmission devices as of the date of real estate valuation. The balance sheet must indicate replacement cost, depreciation percentage and residual value;
technical certificates for structures and transmission devices. If they are absent, a technical description of the object: dimensions, parameters, characteristics;
real estate tax rate for the current year;
lease agreements for structures, including rental rate calculations;
documents confirming the percentage of actual physical wear and tear of the structure and transmission devices. To compile them, commissions are created with the participation of technical specialists (chief technologist, mechanic and others), who are charged with responsibility for the technical condition of the object being assessed. The documents reflect parameters such as the suitability of the structure and transmission devices for use, and the percentage of their actual physical wear and tear.
documentation for the land plot indicating the type of right, land tax rate, etc.

List of documents required for the assessment of an unfinished construction project:

for individuals – passport of the copyright holder; for organizations - documents on registration, on the election (appointment) of a leader, his passport details;
registration certificate (if the object is registered in accordance with the procedure established by law);
title documents for the land plot;
permitting documentation for construction;
explanatory note to the project;
certificate of book value issued by the organization’s accounting department (for legal entities);
if the object is preserved - an act of conservation;
an extract from the Unified State Register on the presence (absence) of arrests, encumbrances, restrictions on the use of real estate;
documents confirming the industry affiliation of the object;
data on the structural system of the building (structure);
permitted power consumption (water, electricity, gas supply, etc. annually);
cadastral (technical passport) indicating the development area and the degree of completion of construction both in general and for each structural element.

What is the result?

Upon completion of the work, the customer will receive a report, which can be made in paper or digital form. It is printed, stapled and certified with the organization’s seal. The assessment contains information about the customer and the contractor, the research method, the condition of the property, the current situation on the market, as well as detailed photographs taken from different angles, and copies of the borrower’s documents (purchase agreement/DDU or other title documents, passport, cadastral plan, explication).

According to the law, the received document confirming an independent examination is valid for six months. Anton Krasilnikov explains that, for example, refinancing in a year will require a new assessment.

The completed appraisal album is sent to the bank, where the mortgage approval procedure continues.

How is the assessment done?

The real estate valuation procedure consists of five stages. Deadlines may vary. It all depends on the region. In some places you can get assessment results the very next day, and in others in 2 weeks.

The first stage is setting the task for a specialist appraiser. Here it is important to determine the purpose of the assessment and the type of value. If an apartment is appraised in order to obtain approval for a mortgage loan, then you need to calculate not only the market value, but also the liquidation value. It is important that it is at the first stage that the customer must provide the representative of the appraisal company with all the documentation he has;
At the second stage, you will have to enter into an agreement with the appraiser and pay for his services. It is important to indicate in the contract the cost of services, deadlines for completing work, the rights and obligations of the parties;
The third stage is collecting information about the property. The appraiser goes to the site, checks all the documentation, records existing defects and shortcomings;
The fourth stage is one of the most important. Here the cost of the object is directly calculated. All methods that the appraiser used during the calculations are necessarily displayed in the final report;
Generating a report is the final stage. According to the current legislation of the Russian Federation, a report issued by an appraisal company must be numbered and bound.

Once again, let us draw your attention to the fact that courts and financial organizations take into account only official papers! The best solution is to contact a trusted appraisal company.

If you want to buy an apartment in Sochi and want to do it with maximum benefit for yourself, contact the specialists!
We know everything about the market, monitor price changes and will help you buy a home on the most favorable terms! Back to Contents