Commercial Lenders
Accurate valuations are more important than ever.
Savvy business owners know how to read appraisals, and know how to take their business elsewhere. The report on which you base your lending decision on must be complete and accurate. You have a duty to protect bank investors from not only losses due to overvaluations, but also from opportunity losses on undervaluations that send loans to competitors.
This means that you need accurate appraisals.
The Subject property isn't the only thing that requires study.
What are the trends in the area? Is this an area of potential growth or is this a dying area? What are the demographics? What is the ratio of people moving into or out of the area? What is the employment vs. unemployment rate? These are all questions that should be analyzed and answered in a commercial report.
What goes into a commercial appraisal?
Well, that depends.
Unlike residential appraisals, which typically have standard uses that can be reported on a form, commercial appraisals are nearly always one-off reports that must take many factors into consideration.
Just a few of these include:
What property rights are being appraised?
- Fee Simple?
- Leased Fee?
- Leasehold?
- Subleasehold?
- Sandwich position?
What type of value is being determined?
Some of the most common types of value include:
- Market Value
- Value in Use
- Investment Value
- Insurable Value
- Liquidation Value
In addition, hypothetical conditions or extraordinary assumptions may be required to determine values either "as-is" or "subject-to" many other factors.
If the property is a tenant occupied space, the Appraiser must be able to read and understand the different aspects of each of the leases involved. From escalation clauses to expense stops, all of which have dramatic effects on the value of the property.
What types of commercial property do we at ArkLaTex Appraisals have experience with? Contact Us or see our Portfolio Page for samples of recent projects.