Appraisal
Synonyms: Valuation، Property Appraisal، Valuation Report
Last updated: 2026-09-25
Short Definition
An appraisal is a written, documented opinion of a property's value at a specific date, prepared by an accredited valuer for a defined purpose such as sale, mortgage, insurance or litigation, and delivered in a report that sets out the scope of work, methods, assumptions and concluded value.
Overview
Legal Basis
The statutory reference is the Accredited Valuers Law (Royal Decree M/43 of 9/7/1433H): Article 12 on the valuer's details on reports, Article 14 on personal signature without delegation, Article 17 on keeping records for ten years, and Article 19 on the valuer's liability to compensate the client or third parties for damage caused by errors. In court, Chapter Ten of the Law of Evidence (Royal Decree M/43 of 26/5/1443H) regulates expert appointments: Article 110 lets the court, on its own motion or at a party's request, appoint one or more experts and accept an expert agreed by the parties, and Article 113 requires the expert to disclose any relationship or interest before starting.
Practical Example
Three brothers inherited a 1,200 m² commercial plot in Dammam and disagreed on its value at partition: one said SAR 3,600,000, another SAR 2,400,000. They agreed on an independent accredited valuer, who analysed comparable land sales averaging SAR 2,500 per m² after adjustments and concluded a market value of SAR 3,000,000 in a signed report. Had the dispute gone to court, the judge could accept the agreed expert or appoint another. Based on the report, one brother bought the plot and paid each of the other two his share of SAR 1,000,000.
Common Mistakes
- ✗Ordering an appraisal from an unlicensed person or a broker; the law restricts valuation to accredited valuers in their licensed sector.
- ✗Accepting a report not signed by the valuer personally or lacking the licence number and valuation date.
- ✗Using a report prepared for one purpose, such as financing, for another, such as partition or financial statements, without reviewing the scope of work.
- ✗Ignoring the assumptions and limitations in the report and looking only at the final figure.
- ✗Giving the valuer an expected value or pressuring them; this undermines independence and is prohibited by the SAMA circular in financing cases.
International Differences
In the United States the term appraisal is used, and appraisers are licensed by the states and follow USPAP, whereas the UK and the Gulf use valuation and RICS or IVS standards. In Turkey the terms ekspertiz and değerleme are used, and banks rely on reports by SPK-licensed experts. In the UAE and Egypt banks use valuers registered with the competent authorities. The common global point is that a report is a dated professional opinion, not a guarantee of sale price.
