6 Things To Know About Commercial Appraisals
Updated: Nov 19, 2020
Before we find out more about must-know things about commercial real estate appraisal, let's first of all understand what a commercial real estate appraisal is and why is it important!
A commercial real estate appraisal is often undertaken for many reasons. It is to ascertain the value of a commercial property to determine an appropriate sale or purchase price, to help settle an estate in case of death, to settle legal disputes and to even assess relevant property taxes. An appraiser will assess the commercial real estate and identify the optimum use of the commercial property. The property is assessed from multiple viewpoints and using a variety of methods in order to provide the most accurate valuation. Knowing the accurate value of your commercial property allows insight into the maximum rental income the property can yield, the current market value of the real estate or site, and its resale or investment value.
Let's now have a look at the 6 things that you must know about commercial real estate appraisals. Here are the important factors that you should be aware of:
#1 Is the appraiser Certified?
You need to establish whether the appraiser is certified or not. A certified appraiser is licensed, insured, and aware of relevant regulations. Certified appraisers also lend expertise and professionalism to a property appraisal, therefore, this is the first thing you should focus on. Before you hire an appraiser, find out more about them.
#2 Prior Experience
It is also equally important for the appraiser to have prior experience and demonstrable skills in similar projects. Because all projects vary, you need to find out if the appraiser has handled comparable projects before. The appraiser should be fully aware of how to handle your specific type of commercial real estate. Commercial properties fall into a number of categories including: industrial, agricultural, office, or multi-unit properties. Make sure your appraiser knows how to handle yours.
#3 Share everything about the property with the appraiser.
The appraiser should know everything about the property to help derive the most accurate value. Therefore, you should disclose all relevant details such as the legal description of the property, previous assessments, property tax bills, and so on. The more information you share, the better informed the assessment will be.
Both parties have to comply with local codes and regulations. It is important to keep this in mind at every stage of the assessment process. Ethics are the fundamentals of commercial real estate appraisal. An appraisal completed by a reputable and ethical appraiser will have more merit, and be seen as more accurate.
#5 Purpose of the appraisal
A variety of methods can be used in the appraisal of a commercial property. One of the determining factors for which method is used is the purpose of the appraisal. Make sure to disclose the purpose of the appraisal to your appraiser for the most valid appraisal.
#6 Date of the Appraisal
It is important to note the date of any given appraisal, as appraisals on a commercial property are only valid from 6 months to 1 year. Because markets and property values fluctuate, another appraisal must be done after the validity period is up. Learn about the validity period for a commercial property valuation in your area.
Conclusion: Commercial real estate is always a large investment. We should never overlook any aspect which may add value to our commercial real estate. It is recommended that you hire expert consultants for any future commercial property appraisals. If you are looking for a trusted appraiser in the region, we can help. We have been helping our clients with commercial real estate appraisals for over 46 years. Give us a call at 587-400-3858 today!