Before you buy a commercial building, you'll want to have an appraisal done so that you know you're making a wise investment. A commercial appraisal is different from residential appraisals that you might be used to. You let the appraiser know the reason for the appraisal and the depth of the information you want to obtain. The complete process involves a physical inspection as well as research on the building. Here are some other things to know.
The Appraisal Is For Your Use Only
The appraiser sends the final report to you, and it's not released to anyone else unless you pay for a summary report you can share. That's because you, the seller, and the lender may have different reasons for wanting an appraisal, so each party usually gets their own from an independent appraisal service. This keeps the information you find private, which could benefit you during the sale or for tax purposes later.
You Can Specify What You Want To Know
If you're buying a commercial building for your own use, then you might worry about the value of the land and building, and if the value is expected to rise. This keeps you from paying more for a property than it's worth. If you're buying the building to lease, then the appraisal is done differently. In addition to determining the value of the property, its lease value is also calculated.
This helps you determine if you'll make a profit by leasing the building after you buy it. If you plan to convert the property or change it from its current type of use, then you'll want an appraisal that looks into zoning regulations and public records of previous owners and types of businesses on the property. You may even want information on the demographics of the neighborhood to determine if your business will fit in well.
An inspection of the property is usually just a minor part of the process of a commercial appraisal. Much of the work involves research that takes several days to complete. You'll need to hire a commercial appraisal firm to do the job since the work is beyond the scope of a residential appraiser. Before the work starts, let the appraiser know why you want the report and if you want a short report for your use only, a report you can share, or a detailed report. Each has a different cost, so you want to understand your needs before you hire the appraiser.
For more information, contact a company like East Coast Appraisal Services.