“Commercial is very different from residential in the fact that appraisals are much more subjective in nature,” says Scott Everett, founder and president of Supreme Lending, a mortgage lender in Dallas. “Much of the value derived from a commercial building is based on the rental rates received relative to the expenses paid out. The underlying asset is important, but not even close to the same way that a residential properties value assets.” – www.inc.com/guides/201105/10-things-about-commercial-real-estate-appraisal.html
Most people think that inspecting a property is the main work of a commercial real estate appraiser, but no. It’s just the first step. Appraisals differ in difficulty, process, and length of time needed to complete the appraisal. Ownership, zoning records, and actual location need to be established. A land surveyor may need to be called in to check the actual description of the property as well as the condition and location. Demographics and lifestyle information may need to figure into the value equation. With Seattle and King County developing more and more businesses and workers, their housing and commuting need to be considered. Finally, existing commercial income and comparable property sales, replacement costs all need to be considered. Appraisers analyze all aspects that affect property values, before they begin to draw their conclusions and give an official and well documented appraisal. An appraisal may take weeks or months to complete because they need to stand up to review and anticipate change as well.
One of the top things about commercial real estate appraisals is: “Appraisers Must Adhere to a Strict Code of Ethics.” Appraisers are easy to track. The have to keep up on local codes and national guidelines. Each appraiser is different, but here is an example of what people should look for in a Washington State appraiser: Richard E. Pinkley is the President and CEO of GPA Trueman, a Washington state corporation. Rick began his appraisal career in 1990 with Greer, Patterson and Associates, Inc. and purchased the company in 2002. In 2011 a purchase of Trueman Appraisal Company was arranged and the two companies merged with the operations conducted in University Place. Mr. Pinkley has worked for banks and mortgage lenders. He has been a leader of the local community of appraisers as the Treasurer of the Puget Sound Chapter of the Appraisal Institute and as branch chapter Chairman, serving as a voting member on the board of the Seattle Chapter of the Appraisal Institute. He is a candidate for MAI designation in the organization, and member of International Right of Way Association. Professional interests include problem solving for unique properties and complex projects. A particular specialty is the appraisal of Native American lands for tribal members, tribes and the US government. Rick has testified as an expert witness in Pierce and King counties. – www.gpavaluation.net/
In searching for a commercial real estate appraiser, look for a strong history of satisfied clients, familiarity with projects in particular counties and regions, and work on similar projects. Once you have selected an appraiser, then the process can begin. Only after an appraisal is done can there be movement: selling, buying, financing, or construction. With commercial property everything thing hinges on a legitimate commercial real estate appraisal.
by the Sub Times
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