Some FAQ on appraisals in Mexico
The appraisal is a technical document prepared by professionals to value a real or personal property. For example, a house, jewelry or a car. The appraisal expresses the real value of your estate (in opposition to an affective value), it helps to build trust between buyers and sellers, and facilitates the negotiation process between heirs in case you plan to alienate assets of your estate.
Here are the most frequent asked questions on the subject.
1. When is it useful?
• In the real estate buying process.
• To be entitled to a mortgage.
• To insure your property and set an appropriate value of the sum insured.
• To fix the price of rent.
• To compare the tax basis of property tax given by a tax authority.
• To understand the market value of your property.
Appraisals for judicial purposes are also performed. For example, foreclosures, repossessions or subdivision actions, etc.
2. The assessment coincides with the final price?
The amount resulting from the appraisal is not always the commercial value, neither the tax value, because the appraisal only reflects a specific methodology to perform valuations.
To perform valuation, appraisers take into account the value of the land, by total area and the price per square meter in the area; also, the type and size of construction, whether economic, regular, luxury; and the price of similar properties in the area. For example, if a house is located in a nice subdivision, the final price will result higher than the property tax value (the appraisal will be somewhere in between). If the same house is located in an area that is not so demanded, the final price will be very similar to the tax value (the appraisal will almost match the final price).
In case there is a disparity between the final price, the property tax value, and the appraisal, taxes will be paid at the highest sum from the three mentioned values.
3. How do I know I am dealing with a duly accredited appraiser?
Ask for accreditations, certifications, memberships and registrations to the appropriate Institution.
• If the purpose of the appraisal is to finance a house, the appraiser must be registered with the Federal Mortgage Society (SHF), check the website which is continuously updated.
• If the purpose of the valuation is to pay taxes related to the property, the appraiser must be registered with the local tax authority.
4. Do appraisals expire?
Yes, the usual expiration date is six months, provided that the property is not modified during that term and not different economic conditions arise to those in which the assessment was performed.
5. How much does an appraisal cost?
It is calculated according to the square meters of construction or land. It is a variable cost by state, or municipality (county) where the property is located. On average, the appraisal of a house is 1% of its value; that is, whether it is 1 million pesos and up costs $10,000 pesos.
For more information on the subject, please contact:
ESTATE IN MEXICO
CEO office 210.858.9662 cell 210.501.5658
11914 Budapest, San Antonio, TX 78230
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