It is crucial that proper understanding of commercial appraisal process is gained. The reason why this is considered as crucial stems from the differences that exist between the procedure in this case and the residential property one. Compared to residential ones, commercial appraisals are subjective in nature.
The commercial appraisal process involves three main value aspects namely the cost approach, sales comparison approach and income capitalization approach. In cost approach the value of the property is deemed to be equal to its replacement cost. The comparison of direct units is what the sales approach is based on. You derive income capitalization from the rationalization of substitution.
The inspection of your property is considered a very small part of the entire commercial appraisal process. The size and intricacy of the property are the factors that will determine the time it takes to finish the inspection. Among the information that the appraisers are looking for at the time of inspection are lifestyle and demographic details, zoning and public ownership.
You should never try to provide misrepresented information during the commercial appraisal procedure. Appraisers do not take the information that you give them at face value but will established its authenticity from various sources. You risk having anything you say to be deemed as untrue if before you had lied about certain facts.
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.
The specialists carrying out the commercial appraisal process are bound by an inflexible code of ethics and are required to abide by it. One of the requirements is providing reports that are not biased. Disciplinary action can be brought out against an erring appraiser which can go as far as being stripped of the certification. It was due to the desire to adhere to the set of code of ethics that a request that you make to an appraiser can be declined.
The person who requests for a commercial appraisal is the one that is deemed to be the client. If the purpose of the appraisal is for financing the lender is the customer since he is the one that ordered it. As a matter of obligation, the appraiser will not disclose the report or any other confidential information to you. Why this is essential is because the client confidentiality must be maintained. 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.