Property Valuation: How to Know the Real Price of Your Home

Your property is not worth what you paid for it. It is not worth what the cadastre says. It is not worth what your neighbour is asking on Idealista. It is worth what a qualified buyer is willing to pay today.

That is the foundation of every property valuation. And understanding the difference between the various “prices” that exist can save you months of frustration and tens of thousands of euros.

The Four Prices That Exist

1. Cadastral Value (Valor Catastral)

This is the value assigned by the tax authority to calculate property taxes such as IBI (annual property tax) and plusvalía municipal (local capital gains tax). It is typically well below market price — in Madrid, the cadastral value usually represents between 40% and 60% of the real value.

What it is useful for: Calculating taxes. As a reference for selling, it is meaningless.

2. Portal Asking Price

This is what owners list on Idealista, Fotocasa or Pisos.com. But asking is not selling. Portal data reflects seller expectations, not actual transactions.

The gap: In Madrid’s prime areas, asking prices are, on average, 15–20% above real closing prices. A property listed at €900,000 closes at €750,000–€780,000.

What it is useful for: As a general market reference. But making decisions based on asking prices is like pricing your car by looking at what other sellers are asking on a classifieds site.

3. Bank Appraisal Value

This is the value assigned by a certified appraiser so that a bank can grant a mortgage. It follows a regulated methodology (Orden ECO/805/2003) and tends to be conservative.

What it is useful for: For the bank. It does not necessarily reflect what a buyer would pay — it reflects the minimum value the bank will accept as collateral.

4. Real Market Price

This is what buyers are actually paying for comparable properties in your area. It is derived from closed transactions (not published listings), adjusted for differences between your property and the comparables.

What it is useful for: This is the figure you need in order to sell.

How a Professional Valuation Works

A professional property advisor follows these steps:

Step 1: Comparable Analysis

Recent closed transactions from the last 6–12 months in your area are identified, matching properties with similar characteristics (size, type, floor, condition). Asking prices are not used — closing prices are.

Sources include:

• Land Registry (Registro de la Propiedad) — public deeds
• Professional industry databases
• The advisor’s own transactions in the area

Step 2: Adjustment for Differences

No two properties are identical. The valuer adjusts comparable prices according to the differences:

• Floor level: A fifth-floor exterior flat is worth more than a first-floor interior one
• Condition: Renovated versus unrenovated can mean a 15–25% difference
• Aspect and natural light: South-facing and exterior properties command a premium
• Extras: Terrace, garage, storage room, on-site concierge
• Building: Year of construction, condition of the building, neighbours

Step 3: Current Market Analysis

A valuation does not happen in a vacuum. The advisor considers:

• Current stock: How many similar properties are currently for sale?
• Active demand: How many buyers are searching in this area and property type?
• Price trend: Is the market rising, falling or stable?
• Average time to sale: How long are comparable properties taking to close?

Step 4: Price Recommendation

The result is not a single number — it is a range. An honest advisor will provide:

• Recommended listing price: The price at which to launch in order to generate interest and close within a reasonable timeframe.
• Expected closing price: What you can reasonably expect to receive after negotiation.
• Minimum acceptable price: The point below which selling does not make sense.

Signs of a Bad Valuation

Be wary if the advisor:

1. Tells you exactly what you want to hear. A professional will not tell you your property is worth €1.2M when the market says €950K. Those who do are trying to win the mandate — and will lower the price eight weeks later.

2. Cannot show you real comparables. If the price cannot be justified with closed transactions, the valuation is opinion — not data.

3. Bases the valuation on portal prices. Idealista prices are not market prices.

4. Does not know your area. Prime valuation requires hyperlocal expertise. An advisor who works across the entire Comunidad de Madrid does not have the same depth of knowledge for Salamanca as one who specialises in the neighbourhood.

How Much You Can Trust an Online Valuation

Automated valuation models (AVMs) are useful as a first approximation, but they have significant limitations:

• They do not visit the property (they cannot assess actual condition, light or aspect)
• They rely on statistical models that miss the particularities of each building
• They do not have access to all real transactions
• They cannot evaluate qualitative factors (neighbours, noise, views)

For a selling decision, an automated valuation is a starting point. A professional valuation with an in-person visit is the data you actually need.

Next Step

If you want to know what your property is worth in today’s market, you can start with our instant valuation tool — it will give you a reference range based on real data from your neighbourhood.

For a professional valuation with a visit and comparable analysis, request a confidential valuation. No commitment, no publication.

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