More often than not, I get calls from property owners, agents and investors looking for a commercial appraisal quote, who aren’t familiar with how much a commercial appraisal costs and are shocked after I provide them a quote for our services. I believe many of these people inquiring are only familiar with the cost of a residential appraisal (typically ranging from $350-$450 dollars). Without a doubt they surely must see the real value and benefits in a commercial appraisal report. Let’s take a closer look at the distinct differences between a commercial and residential appraisal, what an approach to value means and the comprehensive research and time involved that equates to the truth in numbers.
Residential vs. Commercial Appraisals
So what’s the difference? Most commercial appraisals consist of narrative reports ranging anywhere between 40-100 pages, whereas homeowners typically will receive form reports from residential appraisers. Commercial appraisal reports are very thorough, summarizing and/or describing property information and facts such as current and delinquent property taxes, regional and market area descriptions, site and improvement descriptions, market analysis on the property type and Highest and Best Use. Then depending on property type and use, commercial appraisers employ one, two, or three of the Approaches to Value such as the Cost Approach, Income Approach and Sales Comparison Approach.
Research & Analysis
Much more research and analysis is required to accurately value a commercial property. Appraisers will need to verify data and information by methods of checking County records, utilizing online commercial real estate resources and interviewing market participants and brokers to verify information collected and find out details. As a certified general appraiser, I have seen numerous sale comparables and rent comparables reporting inaccurate information regarding the sale price of a property, square footage and/or conditions of sale.
Truth in Numbers
A commercial appraisal is thorough, calls for accuracy and knowledge combined with experience. Therefore, owners and investors should not be surprised if a commercial appraiser quotes a few thousand dollars. Typically a commercial appraisal in Southern California –will cost anywhere from $2,000 to $5,000 dollars, this fee may vary depending on scope of work, property type, location, and timing. For complex and/or special use properties, the fee can go as high as $10,000+. Don’t be swayed away from receiving quality based on cost. Find an appraiser who has the experience and trust you can count on. Contact West Valuation at 760-563-2055 or simply click here to contact an experienced appraiser.
Author: Michael Hadrys