Real estate valuation fees in mortgage contracts for individuals

In the Name of Allah, the Most Gracious, the Most Merciful Saudi Central Bank (SAMA) Headquarters Office of the Deputy Governor for Supervision

Reference No.: ........................................................
Date: 1441/12/22
Attachments: ....................................................

General Circular

To: Respected Parties,
Peace, mercy and blessings of Allah be upon you,

Subject: Real estate valuation fees in mortgage contracts for individuals.

Based on the powers granted to the Saudi Central Bank under relevant regulations, and in light of its supervisory and regulatory role over financial institutions under its supervision, and its commitment to applying the principles of fairness and transparency in financial transactions.

Accordingly, the Bank wishes to confirm with financing entities that real estate valuation fees shall not be deducted from the customer until after the customer obtains initial approval for financing. Furthermore, financing entities must, before commencing contracting procedures, inform the customer that they are not entitled to claim a refund of the real estate valuation fees from the financing entity in case the financing approval process is not completed due to a reason attributable to the customer, and obtain their acknowledgment thereof.

For information and necessary action.

Yours sincerely,
Fahd bin Ibrahim Al-Shathri
Deputy Governor for Supervision

Distribution Scope:

• Banks and financial institutions operating in the Kingdom.
• Real estate financing companies operating in the Kingdom.

P.O. Box 2992, Riyadh 11169, Tel: 4662300, Fax 4662543