Knowing the value of your property is important before selling it in the property marketplace. In order to sell your property, you first need to get its proper appraisal.
It is very important for an investor to value commercial property. If the property value placed by the owner is too high, then there is no sale that will take place. On the other hand, if the property value if too low, the seller will lose out on a potential profit. You need commercial appraisal if you want to know the real value of your commercial property.
There are many ways of appraising and deciding commercial property market value for a piece of property. Many owners will usually pay one or two appraisers and compare each individual’s evaluation. Some professional appraisers just use an opinion of the value of property. There needs to be land appraisal since not all properties are the same and the value of one different based on location. Since appraising a property’s value does not always use a market-based pricing mechanism, an expert appraisal of the real estate is needed.
Appraisals should be performed by a licensed appraiser. Many times the appraiser bases his opinion on market assessment and the highest and best use of real property. The appraiser using a standardized report form to submit his appraisal. The appraiser will submit a narrative report if the piece of property is complex with many unusual characteristics.
When assessing property, as appraiser will use either a cost approach, a sales comparison, or salary-based approach. With the cost approach, the value of the property is determined by subtracting any improvement from the value of the land. This appraisal method is used for new structures and not so much on older structures. When using the sales comparison approach, the price per unit of land similar to other appraisal amounts of similar properties in the market place are compared. Compared to the other approaches, the sales comparison approach is very objective. Salary-based approach is used to value commercial and investment properties as it evaluates an income stream.
The techniques vary greatly with each other, and because of this the technique used will depend on what type of asset you have. When appraising skyscrapers, then the income approach is used, but if you are appraising retail or office building, the sales comparison approach is used. Your apartment building appraisal uses sales comparison approach. It is best to get an expert appraisal of your property before selling it.
If you are buying commercial property, make sure that you know it’s accurate market value before buying. It is always beneficial to get appropriate appraisal with expert advice.