House valuation: when do you need one and what does it cost?

What is a valuation?

During a valuation, a valuer inspects the home inside and out, assesses the location and the state of maintenance, and compares the home with recent sales in the area. On that basis they determine the market value. This is recorded in a valuation report, which for a mortgage must also be validated by a recognised validation institute.

When do you need a valuation report?

• When taking out a mortgage to buy a home. This is by far the most common reason.
• When refinancing or increasing your mortgage, for example for a renovation.
• In a divorce or inheritance, when the value of the home has to be divided.
• If you want to know what your own home is worth before selling it, although a value estimate is often enough for that.

The lender uses the valued market value to determine how much you can borrow at most. If the valuation comes out lower than the purchase price, you usually have to contribute the difference yourself. It is therefore wise to base your offer on sales of comparable homes. See how much to offer on a house.

How does a valuation work?

1. You choose a valuer. For a mortgage they must be registered, usually in the Dutch Register of Real Estate Valuers (NRVT), and independent of the estate agent selling the home.
2. The valuer makes an appointment and inspects the home. This usually takes an hour or less.
3. They request information such as the cadastral report, the energy label and any leasehold conditions.
4. The report is drawn up and, for a mortgage, validated by a validation institute.
5. You or your mortgage adviser send the validated report to the lender.

What does a valuation cost?

Costs vary by valuer, region and home. For an ordinary home they usually range from a few hundred euros to around a thousand euros, including validation. For a large or special home it can be more. Request a few quotes and check that validation and VAT are included.

The cost of a valuation report you need for the mortgage on your own home is usually deductible as financing costs in the year of purchase. Check the current rules with the Dutch Tax Administration (Belastingdienst). More about additional costs in buyer's costs and additional costs.

How long is a valuation report valid?

Lenders usually require the report to be no older than a few months when the mortgage is applied for, often six months. The exact period differs per lender. So do not have the valuation done too early, but also not so late that it jeopardises your financing deadline.

Valuation, value estimate and building survey

• Valuation: an official market value by a registered valuer. Required for a mortgage.
• Value estimate: an estimate using a valuation model or based on sales in the area. Fast and inexpensive, useful to support an offer, but not suitable for a mortgage. See what is my house worth.
• Building survey: an inspection of the technical condition of the home, such as roof, foundation and installations. A valuer does not do this in depth. See building survey.

With a home value estimate in the Woningdata property report you know roughly what a home is worth before you make an offer, supported by comparable sales. That way the valuation after your offer is less likely to disappoint.