Are you planning to expand your commercial real estate by investing in a bigger space? In that case, you must be looking to sell your current commercial property. If yes, it is time for your existing property to undergo a commercial real estate appraisal. You must be wondering how the appraisals and associated processes work. Keep reading through to understand the need for commercial appraisals and how it can help in maximizing profit.
What is a commercial real estate appraisal?
Similar to residential appraisals, commercial real estate appraisal is done to identify the actual value of the property. However, rather than analyzing the value of single-family homes or individual condos, commercial real estate appraisals determine the property’s value, like multifamily housing units or retail spaces.
Conducting appraisal processes can give an idea to the seller about the best possible price for which they can sell their property. The value is decided considering the current market price of similar properties. It also helps the lenders to identify the property’s worth against the expected loan amount.
Considering from the investment perspective, commercial real estate appraisal gives property investors an idea about their buying potential.
Who conducts commercial real estate appraisals?
All the commercial valuation services, including the appraisal processes, are carried out by a professional appraiser. While initiating the process, the appraiser takes into account the value of other neighboring properties considering multiple aspects. For instance, if you have recently done the required renovations, your property is likely to sell at higher rates than the neighboring defaced spaces. After validating and analyzing the collected data, the appraiser makes the final decision.
Who are the ideal applicants for commercial property appraisal?
Individuals willing to put their property on sale usually apply for its commercial appraisal. Furthermore, the buyer can also initiate the appraisal process if they feel that the cost of the property asked by the seller is too high as compared to the current commercial real estate rates. In addition, the government can also sometimes begin the commercial appraisal process at the time of tax reassessment.
Who bears the cost of commercial real estate appraisal?
The one who feels the need for property appraised, like the buyer, seller, or even the government, will pay for the appraisal fees. However, there are times when the buyer, as well as the seller, mutually agree on getting the property appraised. In that case, they both either pay the appraisal cost equally, or the seller passes on the appraisal cost to the buyer.
Before getting in touch with a professional appraiser, it is essential to identify appraisal parameters. After that, you can conduct thorough research on hiring a credible company by considering the following factors:-
- Consider their work experience by finding out how long they have worked as an appraiser
- Enquire about their license and make sure they have a valid appraiser’s credentials to perform the job
- Understand their appraisal techniques do make sure they do not take any shortcuts
- Consider their fees and timeline to have a rough idea about how long will the appraisal process take
- Request for references or reviews of previous clients
Now you have enough information about the benefits of getting your commercial property appraised. It’s time to hire a qualified appraiser who can make a wise financial decision!