It is crucial that proper understanding of commercial appraisal process is gained. This is especially important since the procedure in this case differs with one of residential properties. Compared to residential ones, commercial appraisals are subjective in nature.
The main facets of value in a commercial appraisal process are cost approach, sales comparison approach and income capitalization approach. The replacement cost of a property is assumed to be the same as its value in the case of cost approach. The comparison of direct units is what the sales approach is based on. You get the income capitalization from the rationalization of comparison.
In the process of commercial appraisal process, the inspection of the property only forms a small portion of the entire procedure. The size and intricacy of the property are the factors that will determine the time it takes to finish the inspection. The information that is of interest to the appraisers during inspection are zoning records and public ownership, investigation of lifestyle and demographic details.
It is highly advisable to avoid giving out false information when the process of commercial appraisal is being carried out. Appraisers do not take the information that you give them at face value but will established its authenticity from various sources. The danger of misrepresenting anything means that everything else you say after that will be doubted.
Any information that is needed during the commercial appraisal procedure must not be withheld. The appraiser may require from you certain items like the set of drawings for the property, property tax bill and income statements and it is important that you provide them. It is for the accurate issuance of the appraisal reports that these documents are required.
There is a strict code of ethics that commercial appraisers are required to have adherence to. One of those is the need to provide opinion that is objective. Violation of this requirement results in disciplinary action by the state that can include the revocation of their certification. When some of your requests are declined by the appraiser, it is because he desires to adhere to the code of ethics.
In a commercial appraisal process, the client is the person who ordered for the procedure to be carried out. If the purpose of the appraisal is for financing the lender is the customer since he is the one that ordered it. The person carrying out the appraisal is obligated not to divulge any confidential information or the details of the report to you. The explanation for this is for the maintaining of the client confidentiality. In case the process is being carried out for purposes of property tax appeal, you can request the appraiser not to release the report to the tax board which he will oblige.