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​​​​​​​The valuation of a property is a process usually sought in a transaction of a flat, villa, land or shop, for the purpose of sale, lease or for a mortgage.

WHAT IS THE PURPOSE ?

The real estate valuation is sought for various purposes, being compulsory in certain situations:

- Within the scope of a judicial process;

- Within the scope of an investment process;

- Inheritance or partition of property;

- In a mortgage lending process for the purchase or construction of a property;

- Valuation required by an insurance entity;

- For tax reasons, such as property valuation (VPT)

- Expropriation for public utility reasons;

- Various types of transactions;

- Within the scope of a property valuation of a private individual or company

HOW DO YOU EVALUATE A PROPERTY?

The valuation of a property can be done in different ways, among which the following can be highlighted:

Comparative Method - Also designated by "Direct Method", "Comparison", "Synthetic" or
"Empirical", is based on the knowledge of the local real estate market and the values of transactions of properties similar to the property to be valued. This is one of the most used methods and inspires greater confidence.

Income Method - Also known as "Analytic Method", "Capitalisation of Income Method" or "Indirect of Income" or "Indirect Method", evaluates the property through the division of the generated incomes (rents generated by the housing annually) for a capitalization rate also annual. This method only uses information on income from a single period. This is another of the most commonly used methods in Portugal. 

Cost Method - Also known as the "Investment Method", "Reproduction Cost Method" or "Replacement Cost Method", this considers that the value of a house results directly from the sum of all costs incurred in its production, from the acquisition of the land, projects, licensing, construction, including the developer's profit. It is used in the valuation of property rarely traded, such as public property, churches, castles, etc.

WHO CAN CARRY OUT A PROPERTY VALUATION?

They have to be carried out by professionals - real estate appraiser or expert with a degree in: Real Estate Management, Engineering or Architecture, or in a relevant area linked to Real Estate valuation; experience in Real Estate valuations; active registration with the CMVM.

They must be registered with the professional association and have insurance.

WHAT DATA SHOULD BE INCLUDED IN A PROPERTY VALUATION

The report should contain the following:

a. Identification of the entity that performs the valuation;

b. Clear identification of the object of the evaluation, including photographs and descriptions of its
physical and functional characteristics, etc;

c. Purpose of the evaluation, with reference to the entity or person for whom the evaluation is made the evaluation is being carried out;

d. Basis and assumptions for the evaluation;
e. Date of the last visit to the property and date of valuation;

f. Warnings [in relation to the discrepancy between the physical reality and the description in the
f. Warnings [in relation to the discrepancy between the physical reality and the description in the registry, when there are doubts in the identification of the property or in relation to the structure and conservation, whenever what is evaluated is not in accordance with the legislation in force, or has a use that is not possible to determine, when there are doubts in relation to the sources
information, the owner of the property at the time of valuation and the conditions of the property at the time of the valuation and the conditions of the lease or assignment);

g. Method chosen;

h. Calculation justification, range of error admitted justified;

i. Value of the property (number and in full), when the valuation concerns a property that constituted by different cadastral properties or fractions for registration purposes, the total value of the property must be
the total value of the property and discriminate the partial value of each of the parts that make it up (e.g. value for each part of the property).
(e.g. value for each fraction or parking garage);

j. Signature of the valuer.