If you own an apartment building, office building, condominiums, industrial sites, shopping centers, or land that is up for sale, that property might be eligible for a commercial appraisal.
You may need a commercial appraisal if your property is being sold, mortgaged, taxed, insured or developed.
The information that you gain from a commercial appraisal is important whether you own, manage, sell, lend money or invest in commercial real estate property — often forming the basis of any business decisions about specific parcels of property.
To get a commercial appraisal, an appraiser has to be certified. At AmeriMac, we have the necessary qualifications to perform commercial appraisals.
The appraiser is charged with getting and analyzing information about the property. The information might include the characteristics of the property and the condition of the property. The information gathered might also include market area data and comparable property data. The appraiser will also take into account scarcity, desire, utility and adequate purchasing power.
Data that was gathered by the appraiser can be utilized to determine property values. These appraisals are often used to help financial institutions, brokers and lenders determine the amount of financing that can be leveraged against the property.
It is vital that commercial appraisal reports satisfy the state and federal requirements such as USPAP (Uniform Standards of Professional Appraisal Practice), as well as the client’s specifications.
There are a variety of reasons that you or another group may need a commercial appraisal report. The following is a list of non-exclusive reasons:
After the appraiser collects the necessary information about the property, the scope of the work is generally established. That is, the appraiser determines what and how much information is necessary to make an accurate appraisal. As mentioned above, this might include market analysis and comparison to comparable properties. This information could include data on the area’s market and comparable properties.
Next, the appraiser gathers, checks and analyzes the information. A report is created giving an estimate as to the value of the property. All of the information is contained in the commercial appraisal report. The costs and fees for a commercial appraisal are typically dependent on the size of the property and the scope of the appraisal.
There are several different ways to determine the value of a commercial property. The basis for each is the data that a commercial real estate appraiser collects. The three most common approaches used to appraise the value of a commercial real estate property are:
In the cost approach method, an appraiser determines how much it would cost to build a replica of the property. Things like depreciation are considered before the appraiser creates a fair market valuation. The cost approach is used primarily for new and unique properties. Why? It can be challenging to find comparable properties to help you determine value.
In a sales comparison/market approach, the appraiser uses sales of comparable properties to estimate what a buyer is willing to pay. This approach works best when there are many properties similar to the subject property and in the same area.
In an income capitalization approach, the appraiser works with a lender to determine the amount of income the property may make over time. Using this forecast, the appraiser can estimate the value. This method works best for properties like apartment buildings or office buildings.
The commercial appraisal process does not have to be overwhelming. Our professional appraisal experts are ready to guide you through the process. AmeriMac Appraisal Management is your trusted provider for commercial real estate appraisals. Our broad coverage allows us to provide exceptional service across the country. You don’t have to worry about compliance, accuracy or downtime when you work with AmeriMac. Our focus is on ensuring you have everything needed to complete your commercial real estate project efficiently. Contact us to see how we can help. We will get you on the way in a fast, accurate and compliant manner.