Conditional mortgage appraisal: what it is and how to avoid it

For many buyers, a conditional mortgage appraisal is completely unknown, and they get an unpleasant surprise in their own case. In this post we answer the general questions and focus on tips to avoid this result in your mortgage appraisal.

What is an appraisal with conditions?

A conditional mortgage appraisal is issued when certain necessary documents are missing, or when there are discrepancies between the physical, registry and cadastral identification of the property, or doubts about its occupancy and use, its social housing status or its compliance with the current urban plan, as established by Order ECO/805/2003.

This appraisal cannot be used to grant a mortgage, as the appraised value may be affected by the condition. Even if the appraisal is still valid (6 months from its issue), it will not be valid for signing the mortgage.

What conditions can there be?

They arise when the minimum checks in art. 7 of Order ECO/805/2003 could not be carried out, or when the documents in art. 8 were not available.

Minimum checks:

• Physical identification of the property, description and floor area, visible easements, state of construction or conservation.
• Occupancy, use and operation status.
• For homes, social housing status.
• Heritage protection status.
• Compliance of the property with the current urban plan.

Documents required for a finished home for mortgage purposes:

• Registry certificate or registry note, issued within the three months before the issue date.
• If it is social housing: the classification certificate or administrative document.
• If the home is rented: the lease and the latest receipt.

There are also general warnings for minor discrepancies, lack of planning compliance or a missing cadastral reference.

Have you just received a conditional appraisal? Those conditions must be removed to continue the process. Tasvalor, as an appraisal company approved by the Bank of Spain, can advise you.