Real estate valuation

Property appraisal is a mandatory procedure for individuals when selling real estate in Ukraine. If you plan to sell an apartment, it is worth learning more about this procedure: why it is necessary, who conducts it, how much the appraiser's services cost and who is obliged to pay for them. It is also important to know what documents are needed for the evaluation of housing. Let's consider all the nuances in detail in this article.

What is real estate valuation

Real estate valuation is the process of determining the value of the object or its part, if the property is owned by several owners at once. For many types of transactions, appraisal is mandatory, not excluding the sale and purchase transaction.

Based on the results of the appraisal, the owner receives a written opinion or report stating the value of the object. The document must be certified by the appraiser's signature and stamp. It is important that the purpose for which the appraisal was carried out is stated in the report. It is not allowed to use the documents for other purposes. If an appraisal is made for the sale of a residential property, it cannot be used, for example, for a lawsuit.

An appraisal can be carried out for any real estate object:

• residential premises - apartments, private houses, townhouses, cottages, dachas;
• commercial premises - offices, warehouses, retail and industrial premises;
• unfinished construction - objects that have been partially built and have not yet been put into operation.

Why is a real estate appraisal necessary when selling real estate

There are many situations in which there is a mandatory real estate appraisal. One such situation is the sale of an apartment or other property. When the parties enter into a sale and purchase agreement, it is necessary to determine the market value of the real estate in order to calculate the exact amount of tax charges and its subsequent payment.

An important nuance - if the parties to the transaction of sale and purchase of the object are legal entities, it is not necessary to conduct a real estate appraisal.

Who conducts real estate valuation

Real estate appraisal for sale can be carried out only by a specially trained expert or subjects of appraisal activity. Not every expert is authorized to appraise property. Here are the kinds of experts who can issue a written opinion:

• independent experts;
• appraisers of the State Property Fund of Ukraine;
• subjects of market activity.

It is important to note that the conclusion can be issued only by a specialist who has at least 2 years of experience in the field of real estate valuation.

There are quite a few companies in Ukraine that provide such a service as "real estate appraisal". Planning to cooperate with such a firm, you should immediately find out whether the appraiser has mandatory authorization documents. These include a certificate of the subject of appraisal activity, a qualified appraiser's certificate, certificates of advanced training, and a certificate of registration in the State Register of Appraisers.

You can check the expert and make sure that he has the right to conduct real estate valuation on the official website of the State Register of Appraisers and subjects of appraisal activity. The register is freely accessible, so everyone can find contacts of the appraiser and contact him. Since in Ukraine there is no norm that an expert must personally inspect the object, you can use the services of a specialist from any region. This is advantageous, as the cost of the assessment may be lower.

What documents are needed for real estate appraisal

For real estate appraisal it is necessary to provide a package of documents. The customer of the service must have with him:

• documents of title - contract of sale, exchange, gift, court decision or certificate for the apartment;
• technical passport of the BTI for the real estate
• passport and identification code of the owner of the object (also passport and TIN of co-owners, if any).

If it is a question of selling a private house, it is additionally necessary to provide:

• lease agreement or land ownership certificate;
• extract from technical documentation on the normative monetary assessment of the plot (if available);
• extract from the State Land Cadastre (if available).

If commercial real estate is sold, copies of such documents will be needed:

• document of ownership of the object;
• technical passport;
• documents certifying the legal status of the land plot on which the real estate is located.

The given lists of documents for appraisal of an apartment, house or commercial object are for reference only. Depending on the specific situation and the presence of various nuances for expert property valuation, the list may be supplemented.

What to do if the appraised value is higher or lower than the market value

The value of the real estate stated in the contract of sale may not correspond to the value that the appraiser has established. Only the seller and the buyer can determine the value of an apartment or other object at which one is willing to sell the property and the other is willing to buy it. In this connection, the price in the contract may turn out to be less than the value from an appraiser. But it is important to note that in this case tax will be charged on the amount that the expert has entered in the written opinion.

If the contract of sale specifies the value of the object, which exceeds its value in the appraiser's report, tax will be charged on the first amount, that is, tax is always paid on the higher amount. This is due to the fact that in the process of taxation of income from the sale of real estate there is a comparison of the real price and the appraised value. The purpose of the comparison is to establish the basis on an individual's income from the sale of an apartment or other property.

It is important to understand that the real estate appraisal is necessary for the proper payment of taxes, while it does not restrict the parties from agreeing on their price at which the owner is willing to sell the property.

In some cases, the property owner may not be satisfied with the appraised value of the property. Then the owner can order a review of the real estate valuation report. It is made on the basis of the norms of the Law of Ukraine No. 2658-14 "On valuation of property, property rights and professional valuation activities in Ukraine". The service can be used several times, but on a paid basis.

How much do real estate appraisal services cost

The cost of property appraisal services for subsequent sale is not fixed. The specific cost is determined by the parties, i.e. the customer and the appraiser, during negotiations, and after the expert specifies it in a written agreement on evaluation.

Depending on the region of Ukraine, type of real estate, its specifics, the price of expert appraisal services can be from 300 to 2000 UAH. Usually the cost of appraising an apartment is lower than the cost of appraising a private house, garage, warehouse, commercial or industrial premises.

When choosing an appraiser, it is important to focus not only on the cost of his services, but also on his experience, availability of mandatory authorization documents, recommendations and reviews.

Who pays for the appraisal of an apartment - the seller or the buyer

The real estate appraisal service is paid for by the customer of the appraisal, who submits the mandatory package of documents and necessary information to an independent appraiser or a company that provides such services.

According to the Law of Ukraine, regulating the professional independent evaluation of all types of property and the activities of appraisers, the customer of expert evaluation can be:

• The owner of the residential property. When concluding a sale and purchase transaction, the buyer cannot be the customer of the appraisal service, as he has no direct relation to the object. But if the parties have concluded a preliminary agreement on the transaction, the buyer gets the right to conduct an appraisal, but he is not obliged to do so.
• A person acting on behalf of the owner. In this case, the owner's representative orders the valuation by power of attorney. This option is relevant for situations where the owner is abroad and sells real estate by power of attorney.

How long is a real estate appraisal document valid

The validity of a written real estate appraisal report has a limited period of time. It is the appraiser who specifies the period of time during which the document remains valid. This period cannot exceed 6 months from the date of signing the property valuation report. When half a year passes, the written report becomes irrelevant: if necessary, the procedure of object assessment should be repeated.

If you need to know not the appraised, but the real market value of the property for a profitable sale, it is worth contacting the experienced realtors of the agency "Mayak". Specialists will analyze the market, inspect the object and help to establish its market price for quick and effective realization. The team also has lawyers and notaries who will help to conduct the transaction correctly and efficiently.