Commercial Real Estate Appraisal FAQs

If you own commercial real estate there are a number of questions you should have lined up if at any time you need a commercial real estate appraisal.  Here are a few frequently asked questions that may arise when you meet with the appraiser.  Additionally, the answers to these questions so you can have a better idea on what type of information you should be receiving from the commercial real estate appraiser.

FAQs

What do I need an appraisal for when I have a realtor?

A realtor can only give you the property value based on a comparative market analysis  of other properties in the same area.  However, an appraiser will give you the exact value of the property based on detailed mathematics that are used by banks.  Additionally, an appraiser will take into account the architectural aspects of the property.

What is in an appraisal report?

An appraisal report has detailed information on the estimated cash flow of the commercial property as well as the facts, analyses and demographics of the market and the neighborhood.  Additionally, there are comparables and flood analyses as well. 

How much will the appraisal cost?

Depending on the complexity of the assignment, the cost may vary.  However an appraisal for a commercial property would be done in a narrative format which translates into a more expensive fee for the service.  You can expect to pay at least a few thousand dollars for the report, but the best thing to do is request a quote.

How long do I have to wait for the report?

You can expect to have between a 48-72 hour turnaround window when waiting for the appraisal report to be finished.  However, if your commercial property was significantly larger and complex, then the report could take a few weeks to complete.

What company does the appraiser work for?

Usually, an appraiser is an objective third party with no financial ties to anyone involved in the business transaction in which they are hired.  It might be good to think of the appraiser as an independent worker because they are licensed by the state in order to do the work that they do.

Getting Legal Help

The questions above a just a few of the standard questions that you should ask an appraiser that comes to inspect your property.  If you do not receive answers that are remotely close to the ones provided then you should probably seek out a new appraiser. You should also consider working with an experienced commercial real estate attorney who can give you advice throughout the appraisal and purchase process.