The asking price of a house in Cumbre del Sol and the appraised value: are they the same thing?

Everything about the asking price and the appraised value

As mentioned above, the asking price and the appraised value are not one and the same. But, what does each of them mean exactly? Let’s look at this in greater detail.

The appraised value

This refers to the value of the property assigned by an accredited and qualified technician or expert. This should be conducted in accordance with Order ECO/805/2003.

The appraised value takes into account a wide range of factors:

• The location of the property within the town/city in question.
• Energy efficiency certificate.
• The number of square metres of surface area it has and what percentage of the building corresponds to it, if it is part of a Property Owner’s Community.
• The orientation (north, south, east or west), as this can affect how much natural light the property gets.
• Access and links to shopping centres, schools, green areas, medical clinics…
• Year built:
• The condition the property is in after any renovations carried out.
• The building’s characteristics and services (lifts, central heating, intercom, etc.).

Taking the foregoing into account, the appraiser can come up with areasonably accurate appraisal of the value of the property on the market. This is the price that the bank will take into account when granting the mortgage to the buyer.

The asking price

So, the appraised value is rather objective. However, this is where it differs from the asking price, which exclusively comes down to you as the seller.. When setting the asking price, the following are usually taken into account:

• Any charges and encumbrances. This is one of the most important factors when it comes to selling a house with a mortgage in Cumbre del Sol, since most people want to be debt free.
• The price paid for other houses that have already been sold in the surrounding area.
• How much profit you are looking to make, for example, if you need the money to put a down payment on another house.
• The taxes to be paid after the sale goes through.

The problem is that, quite often, sellers tend to overvalue their property in Cumbre del Sol. This can prevent a sale going through as quickly and hitch-free as possible.

What happens if the asking price and the appraised value of properties in Cumbre del Sol are different?

An appraised value and an asking price that differ can have someconsequences for the buyer and for you as the seller.

Firstly, bear in mind that the bank will only grant a mortgage of, at the most, 80% of the appraised value if it is going to become the buyer’s habitual residence. If it is to be used as a second home, only 60% will be granted.

Therefore, if the asking price is higher than the appraised value, it will be virtually impossible forpotential buyers with less savings to buy which, in turn, will significantly put off many other potential buyers.

However, the oppositecould occur; in other words, setting an asking price lower than the appraised value. This is more common than you would think and can occur if, for example, you are looking for a quick sale.

Obviously, this benefits the buyer, since he/she will get a higher percentage of the money needed through the mortgage. The only thing to bear in mind is that the tax agency may require you to pay the difference between the Property Transfer Tax (ITP) paid based on the asking price and what you would have paid based on the appraised value.

Nevertheless, if the asking price is lower than the appraised value of properties in Cumbre del Sol it will also work out in your favour, as the house will be sold quickly and you won’t have to pay as much in Capital Gains Tax. In any case, if you would like to know more about how to sell your house quickly and at the highest possible price, do not hesitate to get in touch with our real estate agency in Cumbre del Sol. What are you waiting for?