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 a real estate appraisal and why is it needed?
Valuation of real estate for a mortgage in Sberbank - a procedure for determining the liquidity of the purchased property with the help of an independent expert. According to the Federal Law “On Mortgage”, when applying for a housing loan, the borrower is obliged to provide an existing apartment or purchased housing as collateral. Due to the fact that the bank is considered the mortgagee, it requires the payer to carry out assessment activities.
The lender sets the maximum loan size based on the liquid and market value of the premises. This is how the bank insures itself against non-payment of the mortgage loan by the borrower, gaining the opportunity to sell the property and cover costs.
The client himself also needs an assessment of the apartment; thanks to it, the adequacy of the cost of housing is determined. Also, the borrower turns to an independent appraiser so that, being in a difficult financial situation, he can independently sell the apartment at the market price to pay off the debt.
Housing appraisals for mortgages are carried out by accredited organizations approved by Sberbank. However, he also cooperates with private companies, but on the condition that all requirements and conditions of the procedure are met.
To obtain a mortgage loan secured by real estate, you must present a final report with photographs, graphs and conclusions on the property being inspected. According to Sberbank’s terms, real estate valuation for a mortgage is paid for with the borrower’s funds.
How is the assessed value of real estate calculated?
The market price of an object can be determined in one of the following ways:
- Comparative. The appraiser is looking for other apartments nearby that have similar parameters. And based on them, the expert sets the market price for the property.
- Profitable. This method is used taking into account the profit that can be obtained from using living space. The more profitable the apartment, the higher the cost will be.
- Expensive. The calculation is made taking into account the costs associated with the construction and repair of the facility. The final figure is also affected by the degree of wear. The higher it is, the lower the market price of the property. This method is used when there is an excess supply on the market.
Factors influencing the cost of an apartment:
- Location (favorable/unfavorable area);
- Degree of remoteness/infrastructure development;
- Characteristics of the house (material of construction, number of floors, degree of wear, common area, sites);
- Features of the object itself (layout/redevelopment, floor number, area - general and residential, ceiling height, condition of components, presence of renovation/balcony/loggia).
The appraiser also takes into account the prices of properties located nearby (uses the comparative method). As a result, he establishes the market and liquidation value of the premises. The last amount indicates at what price the apartment can be sold without a long wait for the buyer in emergency circumstances.
What is the job of real estate mortgage appraisers?
The real estate property is assessed only by professional experts, with the proper level of accreditation and a full package of permits.
First of all, the employee collects the necessary information that relates directly to a specific property: year of construction, material of manufacture, degree of wear, number of redevelopments, geographical location, technical equipment, etc. Summarizing the data received, he conducts a detailed analysis and makes an assessment, drawing up a report that includes photographs of the property, graphs, diagrams and detailed conclusions.
The study of a mortgaged apartment can be carried out by an accredited company from Sberbank or an independent expert.
Who pays for the assessment?
The borrower pays for the appraiser's services, but this is not a significant cost item compared to the value of the property. Since the average price of a one-room apartment in Moscow is more than 8 million rubles, the estimate is only 0.06% (based on 5 thousand rubles).
In fact, an assessment of the property being purchased is needed not only by the lender, it can also be useful for the client, because it helps to obtain objective data about the property:
- This will help protect the buyer from overpaying, since sellers often inflate prices, especially on the secondary market;
- A detailed analysis of the ownership structure will help reveal possible problem areas, or dishonesty of the developer when purchasing a primary property;
- When inspecting a building, a specialist can discover problems the existence of which an unprofessional buyer may not even suspect, for example: the emergency condition of the house, illegal redevelopment, hidden fungus, whether major repairs are required, the need to replace pipes or wiring, problems with communications, neighbors, etc.;
- A professional view will help to more objectively assess the infrastructure: the availability of access roads, the efficiency of public transport, whether there are enough schools, kindergartens and hospitals.
Pros and cons of assessments in accredited companies
Main advantages:
- Reliability. Companies involved in legal proceedings or appraisers with a criminal record will not be included in the Sberbank register.
- Competence. The expert must have the appropriate education, certificate and three years of work experience. Based on these parameters, the bank determines professionals.
- Safety. The experts' activities are insured, therefore, if an error is made in the reporting, all the client's costs associated with this will be compensated.
Among the disadvantages of valuing an apartment for a mortgage at Sberbank, the only thing that can be highlighted is that it is impossible to agree with an employee of the company on inflating the cost of the apartment. Also, the appraiser will not be able to change the report if he discovers illegal redevelopment.
Applying for a mortgage at Sberbank
Today, almost all banking organizations offer mortgage lending services. Mortgages are in demand among the population, so the supply market is quite extensive. Most often, citizens apply for a mortgage from one of the largest credit companies in the country - Sberbank.
For many years, Sberbank has been actively operating. Every year it expands the range of banking services for the convenience of clients, focusing on the situation in the country and the world. Therefore, Sberbank’s mortgage programs have several areas, which are characterized by individual offers for each borrower.
How appraisal companies are selected to work with Sberbank borrowers
Every year, Sberbank PJSC selects accredited appraisers to interact with clients.
To participate in the program, each company is required to provide a set package of documents to verify compliance with the requirements. The processing time for candidates varies, with an average of 1 month from the date of submission of the request. The list of Sberbank accredited mortgage appraisal companies is posted on the official website. Subsequently, the document provided must fully satisfy the requirements of the lender.
Reports from appraisal companies not accredited by Sberbank are also considered, but provided that the document meets the established requirements.
Conditions presented
Sberbank establishes mandatory requirements for appraisers:
- The expert must be a member of a self-regulatory organization and have a certificate.
- Every 3 years he is required to improve his qualifications.
- The employee's activities must be insured.
- He has no criminal record or open court cases.
Certain conditions are imposed not only on experts, but also on the companies themselves:
- Two or more employees have special education.
- Professional activity of the organization - from 3 years.
- The work experience of two or more employees is more than 3 years.
Accreditation procedure
If the company fully complies with the requirements, it receives appraiser accreditation from Sberbank. From this moment on, it can provide services to the bank's borrowers.
The organization does not receive official certificates, but is simply notified in writing of the decision made. After this, the company is automatically included in the list of appraisers accredited by Sberbank.
Why do appraisers need accreditation?
Only accredited companies are allowed to work with Sberbank. They are considered more experienced in their field and have all the necessary information.
Expert opinion
Irina Bogdanova
Work experience at Sberbank for 12 years.
In most cases, appraisal reports from non-accredited companies are rejected due to the bank's lack of confidence. Such organizations can act as scammers in order to reduce the amount of the down payment and insurance for the borrower.
Does the bank work with non-accredited real estate appraisers?
Without objective reasons, it is illegal to refuse to consider a report from an unaccredited company. The borrower's right is regulated by Federal Law No. 135 “On Protection of Competition”.
Sberbank interacts with such organizations, but on the condition that all documentation meets the established requirements.
Conditions for issuing a land mortgage
For clients who decide to obtain a plot of land for a loan, Sberbank offers several lending programs. The loan amount is issued in ruble equivalent, and the purchased land serves as collateral. It is allowed to involve third parties who act as guarantors in processing the loan.
Each submitted application is considered with an individual approach. Moreover, many additional factors are taken into account:
- borrower's solvency;
- credit history status.
When registering a plot of land for a mortgage, there is a standard base rate of 9.5%.
Standard documents required for obtaining a mortgage loan
But it is possible to reduce the interest rate by taking out insurance. Any consumer can do this. It is worth knowing that current rates also have certain surcharges. They are as follows:
- + 0.5 points (if the borrower is not a salary client of Sber);
- + 1 point (if the client refuses to purchase insurance policies for the loaned object).
How to order an apartment appraisal for a mortgage
The borrower independently orders and pays for the services of an appraiser. The lender allows the possibility of cooperation with outside organizations, but subject to compliance with established requirements.
How to find an appraisal company yourself
Step-by-step search for an appraisal organization:
- You can order the service by advertising in a newspaper or via the Internet. The client must choose a search option that is convenient for him.
- You need to carefully study the company's website. The presence of a convenient interface, information about the services provided and their cost are signs of highly qualified specialists.
- It is important to check all documents confirming the activities of the appraiser. Particular attention should be paid to the SRO certificate and insurance policy.
- You definitely need to study all the reviews, not only on the company’s website, but also on the forums.
- Experts advise selecting 2-3 options and contacting them for preliminary consultation and clarification of costs.
- Make the final choice based on the availability of relevant documents and reviews.
What you need to know before applying
Before ordering from non-accredited companies, it is better to compare all the pros and cons of such a risk. Even if the law allows you to turn to such organizations for help, Sberbank is still skeptical about them. It will take more time to check the submitted report, and if it does not meet the established requirements, it may be rejected altogether.
Important! The services of an appraiser for drawing up a loan agreement for a mortgage are paid by the applicant.
We select an appraiser from the Sberbank register
A complete list of all appraisers from Sberbank is updated annually in accordance with the law.
List of documents required by Sberbank accredited appraisers
The future owner of the apartment must provide:
- customer's passport;
- technical and cadastral passport of the premises;
- purchase and sale agreement, certificate of state registration of real estate or any other document of title;
- act of acceptance and transfer of housing.
Companies operate in accordance with the law, so the list of securities on the basis of which the assessment is carried out can be changed on an individual basis.
You can find the cadastral passport of the premises using the map:
Stages of the assessment process
This process consists of several stages:
- Selecting an expert and concluding an agreement to carry out an assessment, or ordering an assessment online. At this stage, the time when the appraiser will go to the site is agreed upon.
- Collection of documents required for assessment.
- Output of a specialist to the address. The expert examines the apartment, house and surrounding area, while simultaneously taking photographs.
- Preparation of a written report, where the appraiser describes in detail the object of study, all its characteristics (including the presence of defects, alterations), analyzes the collected data and gives an opinion on the cost.
- Settlements with the appraiser. But some work only on prepayment.
- Delivery of the finished report to the customer/sending the final document directly to the bank via an electronic service (for accredited appraisers).
How the procedure works: algorithm for evaluating a mortgage apartment
Companies use many different methods in their work, but comparative methods are considered the most popular and effective.
The assessment of an apartment for Sberbank is carried out from the point of view of already inspected and sold apartments. The correction factor is also taken into account - the newness of the house, the size of the living space, decoration and infrastructure are affected. The second option is costly. The expert calculates how much money is needed to build a similar facility.
The least popular method is profitable. A property appraiser calculates how much income a property would generate if it were rented out.
The real estate valuation procedure in the second case allows you to determine the liquid value of the apartment, and in the first - the market value. In most cases, both indicators are identical, only occasionally the difference is noticeable.
During the assessment, the expert inspects the premises, takes photographs, compares the actual picture with the BTI plans, identifies potential applicants for housing and checks for the presence of encumbrances.
Collateral Valuation Report
The time it takes to complete a report depends on the complexity of the object; on average, it takes 1-5 business days. Validity period: six months (from the date of submission).
The final conclusion consists of 20-25 sheets of A4 format with signatures of officials. The apartment appraisal report for mortgage includes:
- Appraisal company data.
- Information about the methods of real estate analysis used.
- Information on the appraised apartment.
- Comparative analysis of the real estate market.
- Liquid and market value of housing.
- Applications.
Particular attention is paid to the last part of the document, because... It is there that specific numbers and assessment results are indicated.
Why is an assessment needed?
To calculate the possible loan amount for purchasing a home, you definitely need an apartment appraisal for a Sberbank mortgage. The lender must understand how much money he can get from the sale of the property in the event of the borrower's insolvency.
The services of appraisal companies are most often used when applying for a mortgage, but this may also be necessary in the case of:
- Registration of insurance;
- When inheriting an object;
- Formation of a marriage contract;
- Transferring an object as collateral for other loans;
- Acquisition of housing;
- Registration of the object into the authorized capital of the enterprise;
- Use of housing for business purposes.
Why do banks cooperate with appraisal companies?
The bank cooperates with appraisal companies and invites them to become partners so that borrowers do not waste time searching for an expert. Employees of the organization, taking into account all the nuances and features of the analyzed apartment, will be able to establish the exact market and liquid value of the property. At the same time, the bank will be confident that in the event of non-payment of the debt, it will be able to sell the assessed collateral at the established value.
How Sberbank works with companies or individuals not included in the list of appraisal firms
If the borrower decides to contact an appraisal company that is not accredited by Sberbank, then it is necessary to initially check the company for compliance with the established basic requirements. If any of the points are violated, the assessment report will be rejected.
It can be accepted under the following conditions:
- the borrower informed in advance of his desire to cooperate with a non-accredited company;
- the appraiser has provided all requested documents for verification;
- the lender checked the organization for compliance with business reputation requirements;
- Bank employees studied the finished report and checked it for compliance with the established parameters.
Is it possible to overestimate or underestimate the cost?
If the borrower requires a real estate appraisal for a certain value, it is important to inform the appraiser about this in advance. It is quite possible to underestimate or overestimate the cost.
Since the existing price dispersion in the housing market sometimes reaches significant proportions, you can ask to adjust the price in the right direction. This is especially true for objects with unique characteristics and a potentially high price.
There is also a way to overestimate or underestimate the cost through an illegal agreement with an appraiser who, for an additional fee, will indicate the amount required by the customer. However, this is highly discouraged, since Sberbank may reject the assessment at the first suspicion that the assessment is unfair. In addition, there is a possibility of losing trust in the appraisal company itself.
Sberbank usually allows a deviation from the market price, but no more than 20-30% of the cost.
