Understanding Real Estate Appraisal in the Philippines

What is Real Estate Appraisal?

Real estate appraisal, also known as property valuation, is the process of determining the fair market value of a property based on its location, condition, and market trends. This assessment is conducted by licensed real estate appraisers and is crucial for property transactions, bank loans, and taxation.

Why is Real Estate Appraisal Important?

For Buyers: Ensures they are paying a fair price based on market conditions.
For Sellers: Helps determine an accurate and competitive selling price.
For Lenders: Banks use appraisals to determine loan amounts.
For Government & Taxes: Used for estate settlements, property taxes, and other legal purposes.

Different Types of Property Values

Type of Value	Description	Who Uses It?
Market Value	The estimated price a property would fetch in an open market.	Buyers, Sellers, Brokers
Appraisal Value	The value determined by a licensed appraiser.	Banks, Lenders, Real Estate Investors
Zonal Value	Government-assigned value for taxation purposes.	BIR, Tax Authorities
Assessed Value	Value used for computing real estate taxes.	Local Government Units

Who Conducts a Real Estate Appraisal?

Real estate appraisals are conducted by licensed real estate appraisers accredited by the Professional Regulation Commission (PRC). These professionals follow government and industry standards to determine the true value of a property.

Factors Affecting Property Appraisal

Location: Prime areas (e.g., Makati, BGC) have higher values.
Property Size & Condition: Bigger lots and well-maintained properties are appraised higher.
Market Demand: High demand areas lead to higher property values.
Recent Sales Comparisons: Values are based on recent similar property sales.
Infrastructure & Developments: New roads, malls, and government projects can increase appraisal value.

How to Get a Property Appraised in the Philippines

Step 1: Hire a Licensed Real Estate Appraiser

Find a PRC-licensed appraiser through real estate firms, banks, or private appraisers.

Step 2: Prepare Property Documents

Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT)
Latest Tax Declaration
Location Map or Lot Plan

Step 3: Property Inspection

The appraiser will conduct an on-site inspection to assess the condition, size, and surrounding factors.

Step 4: Receive the Appraisal Report

The appraiser provides a detailed report with the estimated fair market value based on their findings.

How Much Does a Property Appraisal Cost?

Appraisal fees depend on the property type and location, typically ranging from ₱5,000 to ₱50,000. Banks may charge appraisal fees when processing a mortgage.

Common Mistakes in Real Estate Appraisal

Overpricing – Sellers may price too high based on personal value, not market conditions.
Relying Only on Zonal Value – BIR zonal values are for taxation, not actual market value.
Skipping an Appraisal – Leads to underpricing or overpaying for a property.

FAQs on Real Estate Appraisal in the Philippines

1. How long does a property appraisal take?

It typically takes 3-7 days, depending on the property’s location and complexity.

2. Is property appraisal required for buying a house?

Yes, especially if buying through bank financing or if you need an accurate valuation.

3. What is the difference between appraisal value and selling price?

The appraisal value is an independent assessment, while the selling price is based on what the market is willing to pay.

4. How often should I get a property appraisal?

It’s recommended every 2-3 years or before selling or refinancing your property.

News