How are residential properties appraised in Saudi Arabia?
In the US, there are appraisal companies, independent real estate appraisers, and banks who have real estate appraisers as part of their staff. The most common method of appraisal (for residential properties) is the sales comparison approach in which the value of the home is calculated by looking at the sales of nearby comparable homes and adjusting for extras and market changes etc. Here, sales records and other information is public record and easily found online for free. THere are also MLS records and other pay resources with more detailed information.
How is this process done in Saudi Arabia? Is it totally different? Are sales records public? Are there real estate appraisers or do real estate agents act as appraisers?
I am mainly interested in residential non-income generating, already built residential properties.
Most commercial laws, and specifically real estate laws, are going through lots of changes these days, because of the economic boom.
After the stock market bubble, in which many simple people were affected by, they are trying to change old laws and beurocracies that discourage people from other types of investements.
Institutional investors in the stock market represent only 10-20% of the markets liquidity, and the rest simple individuals that considered the market a money making machine, til they got hurt.
Theres a boom in the real estate market as well, however, things are less organized. You only have total value of real estate sold and bought every week.
Theres no records that are available to the public.
The way they evaluate any property, is usually by the estimate of three known real estate agents, and they take the middle one. Thats the way courts do it.
Depending on the purpose, banks may also have employees that work for them or cooperate with some agents. If they are to give a loan based on the value of that property which is to be the guarantee, they’d consider a house worth, say, 2 million SR, worth 1.5 SR and only give you that amount.
Unlike courts which would use the first way especially in cases like inheritance etc.
A similar three-opinions way is used to estimate damages in car accidents as well.