Property Valuation Alternatives for Expats Buying a House in the Netherlands

Your agent just let you know your offer has been accepted for your Dutch dream house. Next up is arranging your mortgage. One crucial step that is often arranged through your mortgage advisor is obtaining a property valuation for your mortgage application. The reason why mortgage providers require this is because they want to be sure what the real value of the property is. If you placed a really high offer, the real value will perhaps be lower than what you offered.

In this article we will inform you about the different valuation alternatives available, along with their pros and cons, as well as associated costs.

Option 1: Independent Appraisal (Market Value Report)

Opting for an independent appraisal involves hiring a certified appraiser to assess the property’s value. This method provides an unbiased and professional opinion on the market worth of the house. The appraiser considers various factors such as location, condition, size, and recent property sales in the area. This information is published in a report and checked by an organization called NWWI for completeness and accuracy. Independent appraisals are recognized by mortgage lenders and are typically required for mortgages exceeding a certain loan-to-value ratio such as 100% financing.

Pros:

• Accepted by all mortgage lenders.
• Generally the most accurate value.
• Can include renovations / value after renovations in the report.

Cons:

• Higher cost compared to other valuation alternatives (expect 700,- to 800,-euro).
• Requires finding and hiring a certified appraiser independently.
• May prolong the mortgage application process (can take up to 3 weeks before you get the report).

Option 2: Desktop (Hybrid) Valuation

A desktop valuation, recently becoming available and gaining popularity in The Netherlands, is a property valuation method that is conducted remotely without physically inspecting the property. Instead of an on-site visit, the valuation is based on available data and information about the property, such as its size, location, condition, and recent comparable sales in the area. Desktop valuations are typically performed by licensed appraisers or valuation experts who analyse property databases, market trends, and other relevant information to estimate the value of the property. They may also use advanced software and algorithms to aid in the valuation process.

This type of valuation is commonly used for properties that are relatively straightforward, such as standard residential houses or apartments. Buyers often choose this alternative when the cost of conducting an on-site appraisal is deemed unnecessary or impractical.

Pros:

• Desktop valuations offer convenience as they can be conducted remotely without the need for the appraiser to physically visit the property.
• Desktop valuations are completed much faster (within a few business hours).
• It costs between 70,- and 90,- euro.

Cons:

• The desktop valuation is specific for one mortgage provider as they have different policies on this, so you need to know upfront to which provider you will submit your mortgage application.
• Generally desktop valuations are only accepted for mortgage applications with loan-to-value ratios below 90%.
• In some cases a desktop valuation is not possible if there are not enough similar properties that can be remotely compared.
• Properties with unique characteristics, extensive renovations, or significant structural issues may require an on-site appraisal to provide a more accurate or higher valuation.

Conclusion:

Obtaining a property valuation is an essential step when buying a house in the Netherlands. While there are different valuation alternatives available, each with its own pros and cons, it’s important to consider the requirements of your mortgage application and your specific circumstances. Independent appraisals are reliable and offer the most accurate assessment of a property’s worth, while the desktop valuation is cheaper and more time-efficient. Understanding these alternatives and their associated costs will empower expats to make informed decisions throughout the home buying process.