Types of surveys available to home owners in Spain

There are a number of types of home and building surveys that people can request and need for particular situations. Here we list the main ones.

Mortgage Survey

A mortgage survey is carried out on behalf of a bank or other mortgage lender. These surveys, though paid for by the borrower, really have the lender as the client and are merely to ensure that the lender’s money is safe. A mortgage survey in Spain, unless it is carried out on behalf of a UK or Gibraltarian bank, has to be carried out by a valuer (tasador) acting on behalf of one of the registered Spanish appraisal companies (sociedades de tasación) approved by the Bank of Spain. These companies have to place a substantial ‘bond’ with the central Bank, which serves as a kind of indemnity fund so that lenders can be compensated in case of gross error by the tasadores. This central control can lead to the appraisal companies being used to influence the market; recently, for instance, appraisal companies were instructed to undervalue in an attempt to reduce mortgage lending and slow the rise in values. So valuations may not actually reflect the market price of Spanish property for deliberate reasons.

Spanish mortgage valuations also tend to be more of a ‘box ticking’ exercise rather than the more subjective building survey by a Chartered Surveyor. Nevertheless these reports are impressive as far as they go. When asked to provide a mortgage valuation as well as a building survey, a chartered surveyor will work in conjunction with tasadores and incorporate their reports into the survey, thus satisfying the requirements of the Spanish law. However a chartered surveyor may also provide an explanation of the tasadores report and a comprehensive defects report that is of more direct use to the buyer.

Snagging Survey

A snagging survey focus on identifying and correcting problems with newly built Spanish properties immediately after delivery. In Spain, property buyers have 15 days after signing the deeds for a new property to report differences between what they thought they were buying ‘off plan’ and what they find when they receive the keys. If discovered later, it can be more difficult to get things replaced. Especially if the final signing is being carried out by someone else with the power of attorney, its always best to have the property inspected in detail by an independent professional and faults and omissions formally recorded.

Building Survey

A building survey in Spain is the most useful kind for property buyers, where the surveyor takes on the role of the buyer and inspects and reports on all those matters that might not have a major influence on the mortgage value, but undoubtedly could affect the buyer’s equity and quality of enjoyment of the house.

Structural Survey

A structural survey is only really carried out to investigate the cause of a problem found and can involve, for example, breaking into the structure or foundations to test their construction

Valuation Survey

A valuation survey is often combined with a building survey. A market valuation of any asset is best described as more of an art than a science. There is no hard a fast rule for valuing properties. No, it’s a matter of gathering as much evidence, knowledge and information of what’s happening in an area and its economy, the influences on people and places. This is extremely difficult in Spain in relation to finding reliable comparative evidence of what price properties have actually sold at – the full money paid. So many envelopes passing around the notary’s table and that’s not counting those at the unknown meeting in the neighbouring bar before! Sometimes even the escritura descriptions can be a ‘work of art’, with the sizes and accommodation bearing no relation to what is actually on the land. Yes, one can create appraisals, work out all the details of a property and apply equations and statistics, but at the end of the day the valuer has to look at the result on his computer screen and ask, “is that a realistic value?” That’s why it’s always stated as an Opinion of Value. Nobody can say exactly down to the last centimo what a potential buyer will pay for a property after negotiation.

That’s perhaps where one can criticise the appraisal companies in Spain, as they DO have to apply rigid formulas for valuing a property, its neighbourhood and location. Whatever comes out of the machine at the end is the stated value. They are obliged to operate this way by detailed laws and regulations which, whilst ensuring standardisation as all properties are treated in the same way, remove the subjective element, the ‘art’, and can result in figures far from market reality. Nevertheless their reports are very useful and thorough in considering the facts of a property.