It is crucial that proper understanding of commercial appraisal process is gained. This is especially important since the procedure in this case differs with one of residential properties. The subjective nature of the commercial appraisals is what makes them to stand out from residential ones.
The main facets of value in a commercial appraisal process are cost approach, sales comparison approach and income capitalization approach. The replacement cost of a property is assumed to be the same as its value in the case of cost approach. 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 time it takes to complete the inspection will vary depending on 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.
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. There will be no credibility for anything you say if you had misrepresented some facts previously.
At no time should you consider withhold any information at the time the process of commercial appraisal is being undertaken. When requested for things like the property tax bill, income statements and drawings of the property, it is advisable to produce them. These documents are required for the purpose of giving the accurate appraisal reports.
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 those is the need to provide opinion that is objective. Disciplinary action can be brought out against an erring appraiser which can go as far as being stripped of the 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. The person carrying out the appraisal is obligated not to divulge any confidential information or the details of the report 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.