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Commercial Real Estate
Abbe Edelman is a professional property appraiser who can perform a property appraisal for both commercial and residential properties. It can be a little more complicated to perform a property appraisal for a commercial piece of property than it is to do a residential appraisal. Business owners have many different considerations that have to be made when they are seeking an appraisal.
Why a Commercial Appraisal is Obtained
A commercial appraisal is a bit more subjective than one for a residence. When performing a commercial appraisal, the appraiser must consider the overall value of the building based on rental rates as they relate to what expenses are paid out. Many times a commercial appraisal is completed when a business wants to buy or sell it. It may also be done when the business needs to establish the value of a lease or to make a property tax appeal.
What will the commercial appraiser look for?
Appraisers will take the time to inspect many different aspects of the property to be assessed. They will take a look at the zoning records, research the public ownership, compile comparable sales, look at demographic as well as lifestyle information and consider replacement costs and rentals. They will then analyze all this information in relation to the property’s value. This is really only the inspection portion of the commercial property appraisal.
Property Interest
When the property appraisal is completed it will be important for the business owner to explain why they are interested in the property. In the way of an example, if you desire to know what a piece of property is worth when it is free and clear, you will ask the appraiser about a “fee simple interest.” This just means you are interested in knowing the simple value of the property and any buildings. But if you desire to find out the worth of property has to a landlord when it is rented out to tenants, you will ask for a “leased fee interest” appraisal. And if you want to know the worth of a lease to the tenant, you will ask for a “leasehold interest.” This last request is very commonly requested when a person is considering purchasing a business since they will need to know the value the lease will have to the business. It is very important to speak to the commercial appraiser and express which type of property interest you need appraised.
What the Appraiser will Need from You
It is very likely that if your commercial property is being appraised, you will be asked for a property tax bill, income statements, set of drawings of your property and possibly some other items. The property appraisal will not just need to fill a file; if they ask it will be because they desire to make a proper assessment of the property. If you do not produce what is needed and then you dispute their valuation of the property you will probably be asked for this and possibly more information. You will end up wasting their time and your own.
Appraiser’s Code of Ethics
Commercial and Residential appraisers are held to a very strict code of ethics. They have to follow the Uniform Standards of Professional Appraisal Practice. This requires that appraisers offer an unbiased opinion when giving value to a property. They can face serious penalties and disciplinary actions from states and if they are not fair in their valuations the can have their certification revoked. This assures that the business owner can rest assured that the property is given a fair market value based on the type of property interest the owner has in the property.
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