How Does Activ Property Services Carry Out Valuations for Bank Lending?

Property valuation plays a central role in the bank lending process. Before granting a mortgage or investment loan, banks require a professional valuation in order to determine the market value of the property that will be used as collateral.

Activ Property Services is a trusted player in the real estate valuation field, and its reports are recognized and accepted by all major financial institutions in Romania. In this article, we will explore the detailed process followed by Activ Property Services to carry out a fair and objective valuation, in accordance with ANEVAR standards.

What Is a Valuation for Bank Lending?

A valuation report for bank guarantee purposes is a complex report that provides an accurate estimate of a property’s market value. This document is essential for banks, as the estimated value determines the maximum amount the financial institution is willing to lend.

The valuation must be accurate, objective, and reflect the current state of the real estate market, ensuring both the bank and the client that the loan is supported by adequate collateral.

Activ Property Services plays an important role in this process, providing nationally recognized professional valuations carried out in line with the highest standards of the profession.

The Stages of a Bank Lending Valuation Carried Out by Activ Property Services

The valuation process for bank lending involves several essential stages, each with a well-defined role in determining an accurate property value. Activ Property Services follows a rigorous and detailed process to ensure that the valuation report meets all legal and professional requirements.

1. Collecting Preliminary Information

The first step in the valuation process is collecting all relevant information about the property. In the case of a mortgage loan, valuers request documents such as:

• Ownership documents;
• Cadastral documents;
• Building plans;
• Information about any recent improvements or renovations.

This information provides a solid basis for the subsequent inspection and for the correct valuation of the property. Activ Property Services works directly with the client or the bank to obtain all the necessary documents.

2. Property Inspection

A key step in a bank lending valuation is the physical inspection of the property. The valuers from Activ Property Services visit the location and examine the property in order to collect information about:

• The condition of the building;
• The quality of the construction materials;
• The size and layout;
• The functionality of the space.

This detailed inspection helps confirm the information provided in the documents and allows the valuers to identify any issues that may influence the property’s market value.

3. Real Estate Market Analysis

Once the physical inspection has been completed, the valuers from Activ Property Services carry out an analysis of the local real estate market. This involves comparing the property being valued with similar properties that have recently been transacted in the same area.

This stage is known as the “direct comparison” method, one of the most commonly used valuation methods for residential and commercial properties.

The valuers take into account factors such as:

• Sale prices or asking prices of similar properties;
• Market demand in the respective area;
• Economic trends and urban development prospects.

4. Applying Valuation Approaches

Depending on the type of property, the valuers apply one or more valuation approaches. In addition to the direct comparison approach, other frequently used approaches include:

• The market approach: Used for all types of properties where there is an active market and complete, accurate information regarding recorded transactions or offers for similar properties in the same area. The valuer analyses a series of essential market-recognized criteria, such as location, usable area, quality of finishes, and others, which are adjusted according to the differences between the analysed property and the selected comparable properties.
• The income approach: Particularly applicable to income-generating properties, such as office buildings or retail spaces. The income approach provides an indication of a property’s value by converting annual cash flows into a present value.
• The cost approach: This may be used for all types of real estate. Depending on the method chosen within the approach, either replacement cost or reproduction cost, the valuer estimates the new cost of a similar or identical building, then applies deductions for physical depreciation, functional depreciation, and external or economic depreciation, to which the estimated land value is added.

Activ Property Services uses the most appropriate approach for each type of property, ensuring that the report reflects an accurate and complete picture of the asset’s value.

5. Final Valuation and Report Preparation

After completing the inspection and market analysis, the Activ Property Services team calculates the final value of the property. This value is documented in a detailed report, which includes:

• A description of the property and its characteristics;
• The valuation approach used;
• Comparisons with other properties in the area;
• The conclusion regarding market value.

The final report is prepared in a clear and concise format, making it easy to understand for both the bank and the client. It also complies with all ANEVAR standards, ensuring legal and professional compliance.

6. Submitting the Report to the Bank

Once the valuation report has been finalized, it is submitted to the bank. The financial institution uses this report to determine the maximum amount it can lend to the client, based on the value of the property that will be used as collateral.

Why Choose Activ Property Services for Property Valuation for Bank Lending?

There are several reasons why Activ Property Services is a trusted partner in the bank lending valuation process:

1. Extensive experience: With solid experience in real estate valuation and a broad portfolio of satisfied clients, Activ Property Services has the expertise required to carry out accurate and detailed valuations.
2. ANEVAR recognition: All valuers are authorized by ANEVAR, which guarantees the professionalism of the reports and their compliance with national standards.
3. Strong relationships with banks: Reports prepared by Activ Property Services are recognized and accepted by financial institutions, helping facilitate access to financing under favourable conditions.
4. Transparency and objectivity: Each valuation is carried out with impartiality and objectivity, providing a clear picture of the property’s market value.
5. Tailored services: Regardless of the property type — residential, commercial, or industrial — Activ Property Services provides valuations adapted to each client’s needs and to the requirements of each bank.

Valuing a property for the purpose of obtaining a bank loan is a process that should not be overlooked, as it ensures that the loan is covered by fair and adequate collateral. Activ Property Services plays a key role in this process, providing detailed and accurate reports that reflect the real value of the property.

Whether you are a client looking to access a mortgage loan or a bank seeking to establish the value of collateral, Activ Property Services offers the expertise you need to make informed and secure decisions.