A commercial property appraisal can be a long, complicated, and daunting task if you are not aware of the role and responsibilities of real estate appraisers . However, knowing what to ask real estate appraisers and providing the right information can make the entire task simpler and start you on the right foot of the appraisal process.
Here’s what you need to know about the commercial property appraisal:
Inspection of the property
Contrary to the popular belief, inspection is only the beginning of this multi-faceted, complex process. The entire process may take several days and even extend to weeks depending on the size and the complexity of the property to be appraised.
Real estate appraisers not only inspect the property, but also conduct an in-depth research regarding public property records, demographics, zoning, lifestyle information, rentals, replacement costs, and more. These figures are critical information for assessing the value of a commercial property.
It is crucial to give accurate and correct information to your real estate appraisers while going through the appraisal process. Misrepresenting any facts with the intention to manipulate the valuation process can affect your credibility and also affect the value of your property.
Appraisers try their best to obtain the most accurate information and feigning the facts might affect your reputation adversely.
During the commercial real estate appraisal process, an appraiser might ask you to present a variety of legal documents related to the commercial property. This can include leases and rent rolls, operating statements, property tax bill, diagrams of the property, title report, income statements, original drawings of the building, and many other relevant legal documents.
The sole purpose of such demands is to make the process quicker and easier. You might not know the exact purpose of each document, but the more information you provide, the more swiftly and accurately the entire process will be concluded.
Strict code of ethics
Appraisers must follow a strict code of ethics and present an unbiased and credible opinion every time. Any mistake or an attempt to manipulate the report can result in a disciplinary action. They need to follow the Uniform Standards of Professional Appraisal Practice (USPAP), by law, and any mistake in complying with the codes can result in revocation of their certificate.
If you find any impartial information in the appraisal report, you stand the right to file a lawsuit and lead a strict action. Thus, it becomes important to furnish all details asked by your appraiser to help them fulfil their legal and ethical obligation.
Let your appraisal know who are the intended users of the report. These parties will be identified in the report, and will be the only ones who can legally use the report.
Types of Reports
Usually, two types of reports are issued based on the requirements of the client and their intended use. These include:
Restricted report: It is the shortest and the least expensive one, only designed to be used by a single client or user.
Appraisal Report: It summarizes the data and analysis and can be used by any intended user. It can be tailored to include a wider area of information and is designed to use for a specific audience.
Letting your appraiser know the exact purpose for commercial property appraisal will help them to guide you towards the kind of report you will require.
Know your real estate appraisers
A commercial real estate appraisal process is a complex and intricate process and greatly depends on the appraiser’s judgment, knowledge, and experience. The key to getting a fair value for your property is to find an experienced appraisal firm with a talented team who provides honest, accurate, and timely reports of appraisal and valuation for your commercial property.