If your knowledge of appraisals is limited to the residential variety, there are a few things you need to know about commercial appraisals.
“The time to complete a commercial appraisal is much greater,” said Ken P. Wilson, vice president of the Appraisal Institute. “The property inspection is much more detailed and time-consuming, and a greater amount of data is required.”
A commercial appraiser needs to review the title, survey, construction drawings, leases, operating expenses, tax statements, rent roll and property condition reports—at a minimum—to complete an appraisal.
Other things you need to know:
“A relationship with a commercial broker is helpful,” said Heather Francine of CENTURY 21 Award Commercial in Anaheim, Calif. “Appraisers call us all the time to confirm or question comparable sales.”
If you want to learn more about commercial appraisals, call our CENTURY 21® office today.
- An inspection is only the beginning. Appraisers do considerable research and analysis to arrive at their valuation. That takes time.
- Make sure your appraiser has commercial experience.
- Appraisers abide by a strict code of ethics.
- Feel free to point out recent repairs, improvements, upgrades and green/sustainable features, Wilson suggests. Be responsive to information requests, but don’t “hover over” the appraiser.
- Remember that the appraiser does not create the market or value; he/she merely reports it. Cost does not necessarily equal value.