5 Tips to Prepare For a Commercial Real Estate Appraisal
harkins / March 7, 2016
Whether you’re looking to buy, sell, establish a value for a lease, or lodge a property tax appeal, you’ll need to have an appraisal done by a certified appraiser. At Harkins Commercial Real Estate, we want to help you prepare for this appraisal. So with that in mind, here are five things you should know going into your commercial real estate appraisal.
Inspection is Just the Beginning
The inspection part of an appraisal is just one part of the process. It can take less than an hour or up to several hours based on the size and complexity of the property. However, it’s just the beginning of the process.
Appraisers will research public ownership and zoning records, investigate the demographic and lifestyle information, and compile comparable sales, replacement costs, and rentals of the property. Then they will analyze this information as it relates to the property and write a report based on their findings.
Don’t Misrepresent Facts
Appraisers are always skeptical of anything they’re told during an appraisal so they’ll seek to verify any information from additional sources. Sometimes they’ll ask questions when they already know the answer just to test your credibility. If you misrepresent anything during the appraisal process, the appraiser will discredit anything else you say.
Don’t Withhold Information
During your appraisal, you may be asked to provide additional documents like a property tax bill, a set of drawings of the property, income statements, or other things. Even if you don’t know why you’re being asked for these things, you should do your best to provide whatever the appraiser asks. This will help them to complete the job quicker and more thoroughly. Also, if you disagree with the appraisal and supply additional documentation later, you’ve wasted valuable time.
Appraisers Are Held to Code of Ethics
Appraisers are held to a strict code of ethics called the Uniform Standards of Professional Appraisal Practice. This requires them to, among other things, provide an unbiased opinion during their appraisal. If they fail to comply with these standards, it could result in disciplinary action by the state, which could include having their certification revoked. So if an appraiser refuses something you ask for, it probably has to do with this code of ethics.
Identify Intended Users
Commercial real estate appraisal reports are confidential and only certain people are allowed to use them. If there are other people that you intend to allow to use the report, identify this with the appraiser and they will add it to their report.
There are several instances where you may need a commercial real estate appraisal for a commercial property. If you need an appraisal, these five tips will help you to go into the process with the right expectations and to be prepared.
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