Commercial Real Estate Appraisal- What to Know
In the current world we are in, there are many issues to do with commercial real estate that small business owners must digest. This is more so when it comes to obtaining commercial real estate appraisal a process that can differ a little from appraisals done for residential properties. Here are some things that every small business owner must know concerning commercial real estate appraisals.
Inspection is not Everything in the Appraisal Process
Depending on the size and the complexity of the property being appraised, it can take less than an hour to several hours to fully inspect the property. Some clients take this to be the whole process, but it is just the beginning. The property appraisers research on public ownership and zoning records, research lifestyle and demographic data and comparable file sales, replacement costs, and rentals. Next, they analyze this information as it relates to the value of the property. To summarize their inspections; they write a report on their conclusions.
Appraisals: 10 Mistakes that Most People Make
Avoid Misrepresenting Facts
Appraisers are professional skeptics, and they will seek to verify anything you say from other sources. An the appraiser can ask you a question they already have an answer to just to prove your credibility. They are always thinking of ways to defend their opinion if they are ever brought before a court even in cases that don’t show any likelihood of litigation. If you happen to misrepresent any detail; the appraiser will discount the credibility of anything else that you say.
Why People Think Services Are A Good Idea
Don’t Keep some Information
Most likely, you will be requested if you can submit a set of drawings for the property, property tax bill, income statements, and other things. You might not have an idea why the appraiser is asking for something, but it is wise to provide whatever you can. Appraisers have no interest in unduly expanding their work files but certain information may be relevant to their work so the more you can give the more quicker, they can complete their assignment.
The Client is the Party that Asks for Appraisal
If the reason for the appraisal is financing; the client becomes the lender. The appraisers have the obligation to maintain client confidentiality and cannot release the appraisal report or any other confidential information to another party. If you have placed an order for property tax appeal and are afraid that the appraised value might be more than the assessed property value, you can be sure that they will not submit the results to the property tax board without your confirmation.
Identify the Intended User
Make sure that your appraiser knows who you want to use the reports. If you want to buy a property that might mean you intend to share the appraisal with the seller, the lender, and possibly your local property tax appeal board. These parties will be identified in the appraisal report, and they are the only ones allowed to use the report.