A lot of understanding needs to be gained when it comes to the process of commercial appraisal. 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. The difference between these two appraisals is that the commercial one is subjective.
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. The rationalization of substitution is where the income capitalization is derived from.
Inspecting your property is only a small percentage of the whole commercial appraisal procedure. The factors that will determine how long it takes to finalize the inspection are the size and the complexity of the property. The information that is of interest to the appraisers during inspection are zoning records and public ownership, investigation of lifestyle and demographic details.
It is highly advisable to avoid giving out false information when the process of commercial appraisal is being carried out. Appraisers do not take the information that you give them at face value but will established its authenticity from various sources. There will be no credibility for anything you say if you had misrepresented some facts previously.
You should not withhold any information that is required during the process of commercial appraisal. 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.
There is a strict code of ethics that commercial appraisers are required to have adherence to. One of those is the need to provide opinion that is objective. An appraiser that violates the requirement can face disciplinary action from the state that can as well lead to the revocation of his certification. When some of your requests are declined by the appraiser, it is because he desires to adhere to the code of ethics.
When it comes to the commercial appraisal, it is the person that orders for the undertaking of the process that is considered to be the client. If the process is being done for financing, the lender is the client. As a matter of obligation, the appraiser will not disclose the report or any other confidential information to you. The explanation for this is for the maintaining of the client confidentiality. If you requested the process for the purpose of property tax appeal, the appraisal will not release the results to the board if you request.