Understanding property valuation 

20th Aug 2025 · by Roger Widén · 11 min. read

Why are property valuations essential when buying or selling a home in Spain?

An objective view of the property’s value ensures fair pricing and smart, aligned with current market conditions, investments, helping buyers and investors assess growth potential and mitigate risks. A property valuation is also a critical step in the mortgage process. Here we explain what a property valuation is, who carries it out, when and why you need it, and everything else you should know about the property valuations in Spain. 

• Table of contents
• What is a Property Valuation? 
• 15 Factors that Affect the Property’s Market Value
• Importance of the Correct Valuation of the Property
• Who Carries Out a Property Valuation?  
• Property Valuation Costs
• Is the Cadastral Value Different from the Market Value? 
• Is the Property Valuation Different from the Mortgage Lender’s Valuation?  
• Is a Mortgage Valuation Necessary in Spain? 
• What Kind of Valuation Company Should You Use? 

A property valuation is a professional report that estimates a home’s market value at a specific moment. It considers location, size and layout, age and condition, views, amenities, local supply and demand, economic context, legal status, and planned infrastructure.

A property valuation is based on many variables, both internal factors (the property's location, characteristics, facilities, condition, etc.) and external factors (the average price per square metre in the neighbourhood, market trends, infrastructure development, etc.) 

Let’s have a closer look at some of them.  

• Location of the Property: Proximity to the beaches, golf courses, green areas, and essential facilities like schools, hospitals, supermarkets, recreation and sports centres, can greatly influence the property’s appeal and price. If the property is located in a high-demand area with good public services and communications (Marbella’s Golden Mile, Nueva Andalucia, Los Monteros, etc.), its market value will be higher.  
•  Size and Layout of the Property: Larger properties with well-designed layouts, efficient use of space, and better adaptability attract higher valuations, due to their functionality and spaciousness. The plot dimensions, architectural design, and facilities (lift, swimming pool, storage, etc.) are also taken into consideration.  
•  Age and Condition of the Property: Newer and well-maintained properties attract higher valuations compared to older and poorly-maintained ones. Regular maintenance, timely repairs, and aesthetic upgrades increase the property value. Recent improvements, renovations or modernizations can significantly enhance the perceived worth.  
• Infrastructure Development and Future Development Potential: Future and ongoing infrastructure developments (new highways, transport lines, commercial hubs, residential projects, or modern facilities) increase property market value. By improving connectivity and convenience, they make the area more attractive for residents and for investors seeking long-term growth and higher returns. 
• Presence of Amenities: Amenities influence property value by enhancing convenience, appeal, exclusivity, and social connect.  The clubhouses, swimming pools, sports facilities, landscaped gardens, children’s play areas, and recreational amenities in gated communities attract buyers’ interest and drive up the property’s market value. 
• Surrounding Environment: Safety and cleanliness of the environment play a vital role in our quality of life. No wonder, they are among the key factors affecting real estate valuation. A high crime rate puts off buyers, and causes a decrease in property value. Buyers prefer neighbourhoods with peaceful ambience and secure surroundings, like La Zagaleta, Sierra Blanca, or El Madroñal. Clean fresh air, green areas, parks, and recreational facilities positively influence a valuation.  
• Views of the Property: A property with great views is likely to appeal to a wider audience thus command a better price over those without the views (which are rare in Marbella, a town blessed with privileged panoramic views). Marbella’s properties hold amazing views to the Mediterranean Sea, the legendary Pillars of Hercules flanking the Strait of Gibraltar, magnificent La Concha Mountain, or green carpets of golf courses.   
• Market Trends: Real estate market trends affect property value by influencing demand and supply dynamics, location desirability, and buyer preferences. Staying updated on housing trends and economic conditions helps investors and homebuyers make informed investment decisions. You can find out more in Homerun Brokers article about Marbella's 2025 real estate trends, including market growth, rising property prices, and the best investment locations.  Read more in our market report.

• Legal and Regulatory Factors: Compliance with legal norms (clear titles, zoning laws, regulatory approvals, etc.) positively affects prices and demand, while unresolved legal issues lead to lower property valuations due to reduced buyer interest. At Homerun Brokers, independent legal advice is easily obtainable through lawyers we can put you in contact with. 
• Economic Indicators: Economic factors such as inflation, employment opportunities, interest rates, and trust/risk perception affect real estate valuation. Broadly speaking, when the economy is sluggish, so is the real estate market. A strong healthy economy increases buyer confidence and purchasing power, which leads to higher property demand. A slowing economy or rising interest rates suppress property market value by reducing affordability.
• Overall Stability of a Region: A region with consistent growth, high living standards, and minimal disruptions fosters investor interest and enhances property market value. Stable leadership, reliable public services, and favourable government policies and legislation, including tax incentives, deductions, and subsidies, make the region more desirable, directly impacting real estate valuation. The Complete Marbella Guide by Homerun Brokers can help you discover the current situation on the Costa del Sol. Read buying and tax guide in this year's edition: Guide 004.
• Rental Yield Potential: Rental yield and property value are connected. Properties in high-demand rental markets (Nueva Andalucia, Puerto Banus, Marbella’s Golden Mile, East Marbella, Estepona’s New Golden Mile) often command premium valuations, due to their income-generating potential. A high rental yield indicates strong investment value, attracting buyers looking for steady returns, both short-term and long-term. Marbella offers some of the highest rental returns in Spain, with luxury properties by the beach or next to golf courses. Annually, short-term rentals there can generate yields of 5-7%. 
• Brand Prestige, Developer and Architect Reputation: Reputed architects and trustworthy developers behind a property can significantly influence its value.  Buyers are ready to pay a higher price for homes created by them, as these are associated with quality construction, compliance, superior design and architecture, enhanced security features, and timely possession. A brand prestige adds to the property's value. Just like in fashion or automobiles, a renowned name can confer a certain status - and attract buyers. 
• Energy Efficiency and Sustainability: Innovation and sustainability increase property values and ease of selling. Individuals and businesses are willing to pay a higher rent and sales premium for “future-proof” properties with improved energy performance, eco-friendly materials, and smart home technology. Energy-efficient properties allow homeowners to reduce their energy bills while maintaining comfortable living conditions. Contributing to lower carbon emissions makes them a popular choice for environmentally conscious buyers. 
• House Name: Kensington Palace, the White House, and La Casa Rosada aren’t the only homes with names. Any villa, townhouse, or apartment can have one — adding a regal, personal touch, much like an Instagram handle. A name can even add value. A Telegraph survey found that 1 in 14 buyers would pay more for a property with a name, and 40% said they would be more likely to view it. Homerun Brokers offers many beautifully named properties, for example exclusive Villa Liora in La Zagaleta and Villa Sienna in El Madroñal.

The property valuation plays a crucial role in decision-making for both buyers and sellers of the property in Spain. It’s essential for any real estate transaction, as it provides a basis upon which prices are negotiated, while tax authorities use it for tax application. 

Exploring the factors affecting property value is vital for a buyer; it gives clarity on market positioning, minimise risks of overpaying, and ensures your investments align with future financial goals.  

Lender (bank) determines a loan amount based on two figures: the property’s advertised price and its valuation. If the valuation is lower than the asking price, it will be used to calculate your mortgage, potentially reducing your borrowing capacity despite your financial ability. 

Buying a property for less than its market value can negatively affect the buyer and the owner in the important matters including Property Transfer Tax (ITP). When you pay less than its actual value, the authorities may claim the corresponding part of the fee with a surcharge if delayed. 

Choosing a skilled valuer can help ensure a more accurate appraisal and avoid complications in securing your mortgage. Under the 2019 Spanish Mortgage Law, you have the right to select an approved valuation company, provided they are accredited by the central Bank of Spain. While you can choose your own company, some lenders/banks may prefer you use their recommended service.  

• There are free options for getting a property valuation. For online valuations, specialized websites offer algorithms based on recent market data (price per square meter, local trends, etc.) and the characteristics of comparable properties. It’s a quick estimate of your property's value, but it remains relatively general, and does not take into account all the specific details. Some real estate companies offer free valuations as part of their services. A valuation by an agency includes a site visit to assess the property that they will sell. It’s also possible to get a free valuation from a notary in some specific cases for legal or tax-related matters. 
• The mortgage valuation is not free. Estimating the property market value for a mortgage loan, it is issued by a registered and certified appraiser or a company authorised by the Central Bank of Spain. There is no official fixed fee. In 2025, this valuation costs between €250 and €600, but can be much higher, depending on the company carrying out the process, or type of property. It is paid by the buyer; however, some Spanish banks can cover these costs. 

Cadastral value and market price are two different concepts.  

- The cadastral value is an administrative valuation determined on the basis of the data in the land registry. It is used for tax purposes, to calculate the property tax, the municipal capital gains tax, etc. The cadastral value doesn’t fluctuate with the market (as the market value does), and shouldn’t exceed the market value.  

- The market value is established in order to have a price for a property in a purchase/ sale transaction, and to determine the money needed for the buyers’ mortgage. 

A mortgage lender's valuation is not always the same as a property valuation. Whilst the purpose of a valuation is to determine the market value of a property based on size, location, condition and a variety of many other factors we’ve already spoken about, a mortgage lender's valuation is a less in-depth assessment of the worth of the property (with less pages).  As the name suggests, it’s solely for the use of the mortgage lender, with its objective to confirm that a property is worth the sale price, and offers enough security for the lender. 

A property valuation is crucial for meeting the bank’s risk criteria and securing a mortgage. It also identifies any legal issues and problems associated with the property. These issues can restrict lending until resolved.  

Choosing a reputable, accredited valuation company is vital. Ensure the company has an official stamp and knowledge to provide an accurate assessment. The most crucial factors to consider are:  

• Local Expertise and Experience  

• Reputation and Credibility  

• Customer Service and Support 

• Pricing and Value for Money (keep in mind that choosing a valuation firm solely based on the lowest price may compromise the quality and accuracy of the valuation. To avoid any unexpected financial surprises, ask about additional fees or charges ahead of the valuation.) 

Your bank mortgage broker can help you find a qualified valuer. Homerun Brokers are also ready to recommend you a reliable valuation company - contact us today and we'll be happy to help you!