If you’re a commercial real estate owner, there’s never a dull moment regarding the possibilities and requirements of your ever-evolving business. At some point in time you might encounter a situation where you will need the advice and expertise of a professional commercial real estate appraiser to assess your business. If you’re asking what exactly an appraiser is and what they can do for your company, then we’ve got the answers for you. To set the record straight, we’ve compiled a list of some of the most important tasks of this real estate specialist.
Here’s an introduction to what you need to know about commercial real estate appraisers:
The definition of a commercial real estate appraiser
Commercial real estate appraisers operate on the same principles as the ones who assess residential real estate. These property specialists do a thorough evaluation of a commercial listing’s most important traits, taking into account the results of different types of analysis (which we’ll discuss in more detail below). Once the evaluation is done and all features, components and details are taken into consideration, the appraiser can report the value of the property. An appraisal can be done for virtually any type of commercial real estate listing, from office spaces and industrial buildings to land, hotels and shopping centers.
Main tasks and responsibilities
It can be said that there are three main approaches that the commercial real estate appraiser uses to estimate the value of a commercial property.
The first one involves calculating the property’s value by considering the actual cost of constructing it. In the second approach, the most popular one, the real estate professional basically compares the property to similar ones being appraised in the same neighborhood. In the last approach, the appraiser establishes the value of the commercial real estate property by looking at the income potential of the business. All these tactics require not only a thorough on-site investigation, but also a lot of other research by the commercial real estate appraiser.
Why are commercial real estate appraisals needed?
There are several different reasons why you might be required to go through the entire appraisal process for your commercial real estate listing. One of the most common of these is when asking for a new loan from the bank. Other occasions can include (but are not limited to) determining real estate taxes, settling legal issues such as dividing assets after, say, a divorce, or eminent domain work done by the government. Since there are a handful of sub-domains when it comes to commercial real estate appraisals, make sure you find an appraiser who has previous experience in the exact field that relates to your circumstances. This brings us to our next point:
How to find the best commercial real estate appraiser
The easiest way to find the best commercial real estate appraiser is by reaching out to a colleague or an associate in the same field as yourself, somebody who has gone through the exact same procedure, and ask them for their recommendations. You can also contact a firm specializing in this field and set up a meeting with them. During that meeting you can tell them what you need from an appraisal, and they can then offer you the appraiser best suited for the job. Whichever path you choose, to get the best results remember to always specify the exact requirements of your business as well as the purpose of the appraisal.
How to become a commercial real estate appraiser
If you’re playing with the idea of becoming a commercial real estate appraiser yourself, there are a few key steps you can take to direct your career towards this goal. Although the requirements for this specialization are different in each state (something which you should definitely research), there are a few common elements which you can get started on.
First of all, you need to have at least a bachelor’s degree and to attend the training courses required for specializing as an appraiser. Once you’ve ticked these off your list, you’ll need to enroll and work under a certified general real estate appraiser, and then take the licensing exam in concordance with your state’s requirements. After the formal training and licensing are both completed, you can then continue with further training and specialization in the field of commercial real estate appraisal.
Although an often overlooked profession in the commercial real estate industry, an appraiser is quite a fundamental player in the business. He or she has the significant role of assessing the value of a commercial property—whether it’s an office, a piece of land or a shopping mall—based on the core features such as their location, cost and income potential. When looking to hire an appraiser for your business, make sure they specialize in the type of commercial real estate that matches your own.