When you're buying a commercial property for the first time, it's natural that you'd be hoping to save money. You may be unsure you need an appraiser at this stage, but commercial real estate appraisers can be of great help both now and in the future. Here's some information about these professionals to show how they could be a benefit to you.
What Does a Commercial Real Estate Appraiser Do?
An appraiser who only focuses on commercial properties will valuate the property you're about to buy. Their appraisal report can help you avoid being taken advantage of and it can also help you get the loan you need to make the purchase.
When you're buying, a commercial appraiser can also separate out parts of your overall purchase so you have some idea of what you may be able to sell individual parts for later. For example, they can arrive at a value for equipment. They can put a price on the value of the land, if you are thinking about tearing down the structure that's currently on the property. If you purchase a huge piece of commercial land, they can help you determine the value of individual parcels as well as one entire lot.
Even after you purchase the commercial property, an appraiser is still helpful. If your tax bill is very high, for instance, you can have the appraiser do a report on the current value of your property to dispute the local tax assessor's findings. If you are going through a divorce and your spouse wants half of the value of your property, the appraiser can determine how much that is.
How Do They Arrive at Their Conclusions?
Commercial appraisers have a number of methods at their disposal; the ones they use will depend on your particular property and your personal needs. The methods most used are an income approach, a sales approach and a cost approach. An income approach is generally done if you're renting out the property; rents are compiled and the appraiser will use their knowledge of other rents in the area to arrive at the real estate's value. An appraiser will likely do a cost analysis if you're going to demolish existing structures and plan to rebuild. A basic sales approach is done by comparing your property to similar commercial properties. In a sales approach, adjustments are made for location, amenities or features and other factors.
At times, all three methods are used and the appraiser arrives at a final opinion of value after considering and weighing all three methods.
Who Gets the Information The Appraiser Provides?
As the person who commissions the appraisal, you're going to get a copy of the appraiser's report. If you need the appraisal for a loan, the bank will also receive a copy. If you want others to get copies, you'll have to request that from the appraiser directly. Your appraisal is not public information, so you don't have to worry that unauthorized people will view their findings.
Now that you're aware of how vital a partner a commercial real estate appraiser can be, visit some in your city, such as East Coastal Appraisal Services. You may soon form an ongoing relationship that will last for years.