subject: Commercial Property Appraisals [print this page] Are you getting ready to sell or lease your commercial property? You may want to know a little more about what commercial property appraisals are. This appraisal or valuation resembles that of a residential property valuation except there are many more factors involved in a commercial property to evaluate.
Commercial properties are much different in the sense that they are probably quite unique in layout, use and design, whereas with a residential property, there are probably many houses that have the same layout and are quite similar.
Factors in Assessing the Property
Real estate valuations will normally try to use a market comparison, but sometimes it is not possible as the buildings are completely different - such as a warehouse compared to a retail shop. If the market comparison cannot be established then other factors will certainly be part of the appraisal.
These factors include the rentable price per square meter, a rental history and a tenancy record. Many residential agents do not worry about these later two subjects but the rental history and the rental tenancy are necessary for a commercial leaser, as previous renters may have an impact in the new companys business.
Types of Appraisals
You should be aware of the fact that not every real estate valuation is the same. Some appraisals are referred to as desktop appraisals. These appraisals are gathered from information in a database. Another type of appraisal is a physical appraisal - this is where the agent physically goes to the commercial property and looks over it in person. Specialized appraisals are also another type of valuation where a licensed appraiser evaluates the commercial property for a fee. Computer generated valuations are quite common as well and they extract data from online statistics to generate a rough rental figure. If current information is used, the figure may very well be right on target. The chance of this generated number being accurate increase if there are similar commercial properties available to compare, whereas if this commercial property is unique then the figure may be off by quite a lot.
Lending and Appraisals
If you are going to borrow money in order to purchase or lease your commercial property, it will be necessary to have a reliable report put together regarding the evaluation of the commercial property before a lender will approve the loan. Many lenders will actually have their own certified appraiser value the property before going through with the loan.
When financing the property is not an issue, you can ask a certified commercial property appraiser to assess the property when you are ready to buy or lease it. These appraisal fees can cost thousands of dollars but once you have all of the information you need, then you should be able to negotiate an excellent deal for the commercial property.
