ECO appraisal according to ECO Order 805/2003
It is called ECO appraisal to a real estate valuation regulated by the Order ECO 805/2003 and subsequent amendmentswhich establishes the methodology and requirements for determining the value of a property with legal and financial validity. This type of appraisal is necessary in operations such as mortgage guarantees for credits or loans, coverage of technical provisions of insurance companies, determination of the assets of collective investment institutions and pension funds, as well as to appraise properties belonging to financial institutions, properties that act as collateral for their loans and properties obtained through foreclosure.
We are a company approved by the Bank of Spain, leader in the Consultancy, Valuation and Appraisal sector. real estate. For more than 30 years producing official appraisal reports, for different purposes, valid for any bank in accordance with Eco regulations. 805/2003.
What is an ECO appraisal and what is it for?
Definition and purpose of a valuation under ECO standards
A ECO appraisal is a real estate valuation that is carried out according to the Order ECO/805/2003which regulates the criteria and methodology to be applied for appraisals that support financial transactions (such as mortgages). This regulation requires an approved procedure, which guarantees objectivity, precision and reliability in the estimated value of the property, carried out by approved technicians and companies.
The main purpose of the ECO appraisal is to ensure that the valuation of the property reflects its real market value, with technical and legal guarantees, in order to protect both the client and the financial institutions.
Cases where required: mortgages and guarantees
The ECO appraisal is required in real estate transactions such as: mortgage guarantee of credits or loans, coverage of technical provisions of insurance companies, determination of the assets of collective investment institutions and pension funds, as well as to value real estate owned by financial institutions, their real estate guarantees or foreclosed assets.
Although it is not required, in legal proceedings, having an ECO appraisal is highly recommended because it guarantees an independent, approved report that complies with Bank of Spain regulations, which provides greater security and legal validity before the courts.
Difference with other types of non-approved valuations
In contrast to other non-approved valuations, the ECO appraisal is regulated by the Order ECO/805/2003which gives it legal validity and recognition before financial institutions and official bodies. It must be carried out by a competent technician and an approved appraisal company, following a standardised procedure that guarantees objectivity and rigour. On the other hand, non-approved valuations can be prepared without a regulated methodology, lack legal validity and their reliability depends to a large extent on the appraiser's criteria, which is why they are not accepted in financial transactions..
What does ECO Order 805/2003 establish?
Objectives and scope of the regulation
The Order ECO 805/2003 regulates the calculation of the appraised value of real estate and certain rights in rem, and establishes the formal structure of reports and certificates, provided that they are made for specific financial purposes, protecting the interests of third parties such as investors or insured.
Assets assessable under this order
The value of any type of real estate, including rural properties, land, buildings under planning or construction, as well as rights in rem on properties, can be determined by means of an ECO appraisal.
Technical, documentation and approval requirements
This regulation establishes technical methods based on the principles of prudence, transparency and sustainability, sets a mandatory structure for reports and certificates, and requires appraisers and companies to be approved in accordance with the regime of Royal Decree 775/1997.
What is the difference between ECO valuation and RICS Valuation?
Regulatory approach (ECO) vs. international approach (RICS)
ECO appraisal is subject to Order ECO/805/2003 and subsequent amendments, which implies a strict regulatory framework and a standardised methodology aimed at protecting interested third parties (such as financial institutions, insurers or funds) through controls such as technical-legal checks, on-site inspection, supervision of approved companies and prudential principles.
On the other hand, the RICS valuation is governed by the international standards set out in the 'Red Book' of the Royal Institution of Chartered Surveyors (RICS), aligned with the International Valuation Standards (IVS). This approach promotes good professional practice, ethics, transparency and methodological flexibility, relying on the judgement of the accredited valuer (MRICS/REV).
When each is used: banking vs. investor/international
ECO valuation is used in strict regulatory environments within Spain, especially for transactions such as mortgage loans, technical provisions of insurance companies, valuation of the assets of collective investment institutions and real estate, pension funds, and assets of financial institutions or foreclosed assets.
On the other hand, RICS valuation is used in international contexts, such as transnational investments, audits, mergers and acquisitions, investment funds or family offices, and transactions requiring technical expertise and global recognition.
Complementarity in large operations or mixed portfolios
In large transactions or portfolios with both local and international scope, both valuations can effectively complement each other. At Gesvalt, due to our experience in local (ECO) and international (RICS) standards, we are especially qualified to offer this type of integrated service, adapting to the requirements of both the regulator and the global investor.
This is useful for organisations that need to follow national regulatory criteria (ECO valuation) and, at the same time, meet global governance, audit or institutional investment standards (RICS valuation).
Why choose Gesvalt for your ECO appraisal?
Company approved by the Bank of Spain
Gesvalt is officially approved by the Bank of Spain, which guarantees that our valuations under ECO regulations comply with all legal and methodological requirements.
Extensive experience in mortgage collateral valuations and legal proceedings
We carry out ECO valuations for mortgages, technical provisions, judicial valuations and other regulated purposes, providing rigour, transparency and technical solvency in each report.
National network of qualified ECO appraisal technicians
We have a wide network of accredited professionals throughout Spain, which allows us to offer a fast, precise service adapted to the particularities of each location.
Frequently asked questions on ECO valuations
Is an ECO appraisal compulsory for a mortgage?
Is an ECO appraisal compulsory for a mortgage?
Yes, an appraisal under ECO regulations is mandatory for a bank to grant a mortgage, as it determines the real value of the property with legal validity.
How long does an appraisal take under the ECO order?
How long does an appraisal take under the ECO order?
Generally, an ECO appraisal is completed within about 3-6 days of the appraiser's visit, provided that all documentation is available.
What documentation do I need?
What documentation do I need?
It is required an updated registration note, cadastral reference, EEC, if possible a plan or sketch of the property and, in some cases, the certificate of occupancy or other technical documents, which will be required by the valuation technician before or after the visit to the property, depending on its typology, occupancy status, etc...
Is an ECO appraisal valid for more than one bank?
Is an ECO appraisal valid for more than one bank?
Yes, an ECO appraisal issued by an approved company is valid for any financial institution and is valid for 6 months from the date of issue.