In most cases, an appraisal report is needed as the bank requires it to start a financing application. If you are not dependent on a bank or other financial institution and you’d like to purchase real estate on Curacao, then a valuation report might still prove useful if you would like to make an offer for a home or other property.
An appraiser draws up a report stating the value of the property.
You can use an appraisal to estimate whether the asking price of a home is fair. In almost all cases you need a valuation report to get a mortgage approved. The maximum amount of the mortgage does not only depend on your income, but also on the value of your home. If you work and live on Curacao, most local banks finance a maximum of 100% of the market value of your home. If you live abroad, banks usually finance a maximum of 70% of market value.
Tip: if you are going to purchase a pre-owned home on Curacao, then it is often wise not only to have an appraisal but also a structural inspection carried out. A structural report reveals all defects of the property. The architectural report not only lists all defects but also the repair costs that are needed to resolve them.
The appraiser cannot be your purchase broker or the broker of the seller. It is also important that the appraiser is recognized by the institution which requires the report.
Every lender can set its own requirements for the valuation. Before you engage an appraiser, ask your mortgage provider what requirements the appraisal must meet. This way you know for sure that the mortgage provider will accept your appraisal report.
Examples of requirements on Curacao
Banks on Curacao can, for example, set the following requirements:
- Usually the valuation report cannot be older than 6 months on the date of the binding offer for the mortgage.
- The report must have been drawn up by an appraiser who is approved by the bank (you can request a list from every bank in Curacao, which usually contains about 10 appraisers).
In most cases, the costs for a valuation report on Curacao are based off a percentage of the appraised value plus VAT.
Tip: ask in advance for the price and any additional costs. If you request the rates from multiple appraisers, check carefully whether all associated costs are included and whether the appraiser meets the requirements of the mortgage bank.
Are you planning to sell your property or other real estate on Curacao? Then a valuation is an inexpensive way to determine a fair asking price.
Indicate to the appraiser what you need the valuation report for. For example:
- New mortgage. Tell the appraiser what value you need to be applicable for the mortgage. If you’re purchasing an apartment, the valuer must check whether the Home Owners’ Association (HOA) sets enough money aside for major maintenance as included in the articles of association (in most cases at least 0.5% of the reconstruction value).
- Existing mortgage. You can use a valuation report to prove that your home has become more valuable. As a result, you may be able to lower your interest rate. A valuation is not always required for this purpose; many banks also accept the valuation from the tax authorities. Does a bank not equate the value from the tax authorities’ valuation with the sales value of the home? Then it is recommended to request a third-party valuation.
- You are going to renovate, and you want to take out a higher mortgage for this. Discuss your plans and the renovation costs with the appraiser, who can determine the value of the property after renovation. With that higher value you can also get a higher mortgage (provided that your income is sufficient for that).
- Home insurance. Ask the valuer if he can include the rebuild value in the valuation.
- Indication of the sales price of your house, settlement of a death or objection to the valuation of your property by the tax authorities.
If you have an eye on a home in a popular area of Curacao where sometimes offers are higher than the asking price, then you should ask a broker if he can urgently determine the value of the home. Then you will know the value of the home before the statutory reflection period has expired. You can also include a required outcome of the valuation in the resolutive conditions of the purchase contract. You can then cancel the purchase without penalty if the property appears to be worth less.
Are you looking for an appraiser or structural engineer on Curacao? We have years of experience with almost all financial institutions and service providers on Curacao and are happy to put you in touch with the most suitable parties for you.