Who pays for the mortgage appraisal?

If you are buying a home and are in the middle of negotiating with the bank, it is normal to wonder who pays for the mortgage appraisal. We explain everything.

Who pays for the appraisal? The changes brought by the 2019 Real Estate Credit Law

Law 5/2019 of 15 March, regulating real estate credit agreements, came into force on 15 June 2019. It aims for a more transparent distribution of mortgage costs. The law extends the protection of individual consumers and sets a legal framework regulating these loans.

Under this law, the customer (the home buyer), who takes out the mortgage, bears the cost of the appraisal, as well as the cost of the copy of the mortgage deed.

It makes sense that the customer taking out the mortgage pays for the mortgage appraisal, because they are the person most interested in knowing the exact value of the home they are buying, or already own, and on which they are requesting a mortgage loan.

What about appraisals before 2019?

The Spanish Supreme Court has ruled that, where Law 5/2019 of 15 March on real estate credit agreements does not apply, appraisal costs fall on the bank and not on the consumer.

Your rights with the mortgage appraisal

• You can choose any appraisal company you want, as long as it is approved by the Bank of Spain, such as Tasvalor. If you go through the bank you are applying to for the mortgage, it will put you in touch with one. Since you are the one paying for the mortgage appraisal, take advantage of being free to choose the company you prefer.
• You can take the appraisal from one bank to another. Mortgage appraisals are regulated by Order ECO/805/2003 of 27 March of the Ministry of Economy, and only appraisal companies approved by the Bank of Spain are authorised to issue appraisal reports for mortgage-guarantee purposes. You can use your appraisal while it is valid (6 months) to look for financing to buy the home, or to mortgage one you already own.
• You can ask the same appraisal company for a review. Even though it is a specialised report, results may vary between appraisal companies. While the appraisal is valid, you have this option, but it must always be done by the same company that produced the appraisal.

Some recommendations when ordering your appraisal

• Make sure the appraisal company is approved by the Bank of Spain. Unlike other types of valuation, a mortgage appraisal must follow strict rules, and if they are not met, the appraisal is not valid. The company must also comply with Royal Decree 775/1997 of 30 May on the legal regime for the approval of appraisal services and companies.
• Ask for several quotes. As you are the one paying for the mortgage appraisal, you can choose the option you prefer. Banks usually work with a number of approved appraisal companies as providers, but that does not mean you cannot look for the one you prefer, as long as it meets the approval requirements of the Bank of Spain and the law.

At Tasvalor we hope we have answered your questions about mortgage appraisal costs. If you need it, you can order your mortgage appraisal online directly.