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Why do I need a Commercial Appraisal Service?
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When you are about to buy or sell a commercial property you want to know you are getting a good price, or place your property at a fair price in order to sell quickly. Sometimes you want to know where your property stands compared to others like it. Other times you are curious about your own net worth. Whatever the reason for an appraisal, be sure you know why you need professionals that are licensed in this area of real estate.
Your realtor will tell you that the value of the property is based on a Comparative Market Analysis ("comps") of similar properties that have recently sold in the area. Comps need to be within the last 3 months, within 1 mile of the subject property and be of like kind. But what your Realtor won't tell you is that with commercial property
it is almost impossible to determine the value of the property based on these
"comps." Why is that? Because there are so few similar commercial properties in
any given metropolitan area that finding suitable comps is very difficult.
With commercial property, a 12 unit apartment building built in 1947 that needs $100,000 in rehab work is in no way similar to a 23 unit apartment building built in 1985 that has been meticulously maintained and needs no rehab work at all and is 3 miles away! There is no way you can compare those two! So what do you do? How do you determine what the value of the property really is?
Commercial appraisal spans the spectrum of property that includes, apartment, office buildings, industrial buildings, R & D Buildings, mobile home parks, residential subdivisions, retail buildings and shopping centers, mixed portfolios, same-use portfolios, mixed use buildings, and a multitude of other property types.
Appraisers determine the most appropriate appraisal procedure for evaluation. Although this cannot be easily answered, the subject is real property, and as such, market value can be estimated. After examining the value indications, the appraiser places major emphasis on the one, or on those, which appear to produce the most reliable and applicable solution to the specific appraisal task.
There are no “ball park” figures or “guesstimates” when it comes to appraisals and there shouldn't be. It is a detailed process and an important one too. There are no shortcuts because of the standards set by the Uniform Standards of Professional Practice (USPAP), so you know you are guaranteed a fair value. When it comes to
commercial property appraisals there are two ways to go about the process; the realtors way and the professionals way.
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