Questions answered
The purchase price and the appraised value don't match: what happens?
Short answer
It is common for them not to match. Banks usually lend on the lower of the two values, so an appraisal below the price may force you to contribute more savings.
Buying a house is one of the most important financial decisions. It means spending a large amount of money and, if you do not have it, taking out a mortgage. But how does it affect you when the purchase price and the appraised value do not match?
Telling the concepts apart
The mortgage appraisal is a valuation by a company approved by the Bank of Spain under Order ECO/805/2003. The bank uses it as the reference to calculate the maximum mortgage amount.
The purchase price is what buyer and seller agree, based on supply, demand, location, condition, floor area and services. It is a more subjective value.
Appraised value above the purchase price
At first sight, a positive scenario. Most banks offer 80% financing on the lower value of the purchase price and the appraised value. However, you could pay more property transfer tax (ITP): the tax authority may claim the difference. To avoid this, a prior binding valuation from the regional government can be useful.
Appraised value below the purchase price
Banks will offer you a maximum of 80% of the appraised value. You will have to contribute more money. In this scenario you can:
- Renegotiate the price with the seller if no deposit contract has been signed.
- Request a review of the report from the same company.
- Request a second appraisal.
At Tasvalor you can order your appraisal 100% online, with an on-site visit included.
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