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Showing posts with label Commercial Property Appraisal. Show all posts
Showing posts with label Commercial Property Appraisal. Show all posts

Wednesday, August 14, 2013

How A Commercial Property Appraisal Can Look

By Lela Perkins

There are a couple of reasons why a business owner would want to have a commercial property appraisal done on the real estate they own. The first reason is that they are going to try and sell it and want to know how much they can hope to get from a buyer. The second major reason is that they are trying to get a loan from a lending institution and are using the building as collateral in case they fall behind on payments. The value an appraiser generates will go a long way to determine how much money a lender will lend to a business. There are some common things that will be found in a report that determines the value of properties.

Many reports start with telling the reader about the person who has made the report. Most places require that an appraiser takes certain training to become licensed to provide this service. The beginning segment of many reports will document what the qualifications of the appraisers are. They should list the schooling, training and certifications of the report maker. This segment is also where a person will state that they do not have any personal or financial interests in the land or buildings.

A description of the property with relevant details should be included in the summary. Items like the square footage of any buildings and surrounding land should be made available. Does the property have municipal sewers and waterlines. How good is the access the land and what type of vehicles can the road handle is important to understand when one is seeking to make a purchase.

The value of real estate can be subjective when looking at it in isolation from other properties around it. The way to combat this subjectivity is to analyze similar properties in the surrounding areas and how much they have sold for in the recent past. Real estate values fluctuate over time and properties can sell for different amounts depending on what is going on the economy.

The report will normally have the addresses of the buildings they were used in the comparison. The report should detail why these properties were the ones used to reach decisions. This information sets a standard of value in a given neighborhood for properties that are similar to the business owners.

The comparable lands can be a basis to dispute findings. Sometimes a business owner will disagree on the value of his real estate. When the business owner learns who other properties were used, they might be able to ask for reconsideration if they can present other examples of properties that sold for more than the assessment.

The report will also lists details about the land. The report should note if the structure resides in a flood plain. This could affect its potential worth.

Knowing the value of the real estate one owns can help to set a listing price if they want to sell it. Another reason is to help a business leverage their land when they are trying to secure funding and using the land as the basis for a loan. A commercial property appraisal will let everyone know what the perceived value of the land is in the current real estate market.

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