What to Consider Before Choosing a Commercial Real Estate Appraiser
A commercial real estate appraiser is committed to providing an unbiased and impartial opinion of value for your property based on the overall condition of said property, current real estate trends and forecasts, and other factors.
You may have come across Oxford because you are in the market to sell a commercial property you currently own, are looking into property valuation for refinancing purposes, or because you are in the beginning stages of purchasing a new commercial property. Regardless of the reasoning, before deciding upon an appraiser, you are going to want to ask a few important questions. You’ll want to learn a little bit more about your potential appraiser’s education and licensing, relevant experience, and appraisal methodology, among other things. After all, you want to know what/who you’ll be investing your time, money, and trust into, right?
Consider these aspects before closing the deal with a new commercial real estate appraiser.
Brains = Bingo
When it comes to the field of commercial real estate, a proper education is of the utmost importance. First and foremost, it’s important to consider the mandated regulations dictated by the given state you reside in. At the state level, educational and training requirements of appraisers are constantly changing. And if the state thinks it’s important enough to change, you’re going to want to make sure your potential appraiser is certified.
Prior to state (and federal) government involvement in the licensing of appraisers, the Appraisal Institute (AI) was training and educating appraisers. AI is the premier organization producing widely accepted textbooks and appraisal courses. Their standards have always been higher than the state and federal requirements for designing appraisers. Several alternate appraisal organizations have been around prior to licensing, including:
- Independent Fee Appraisers
- American Society of Appraisers (ASA)
- American Society of Farm Managers and Rural Appraisers (ASFMRA)
Inquire about your potential appraiser’s education and licensing, and compare his/her accreditations to those listed above.
Experience is everything
The commercial appraisal industry is rather complex, and generally speaking, takes a minimum of five years working with a variety of properties, mentors, and circumstances to produce a capable appraiser. Along your search for an appraiser, you’ll want to make sure he or she has experience with other properties in your area and/or similar types of properties and, once again, is familiar with your area in the geographic sense as well.
According to the Uniform Standards of Professional Appraisal Practice (USPAP) Competency Rule, prior to accepting a new assignment, an appraiser must properly identify the property in question and have the knowledge and experience to complete the assignment competently. Or the appraiser must:
- Disclose the lack of knowledge and/or experience to the client before accepting the assignment
- Take all steps necessary or appropriate to complete the assignment competently
- Describe the lack of knowledge and/or experience and the steps taken to complete the assignment competently
We will reiterate – look for a market pro
Just because it’s THAT important, we’re going to say it once again.
Look for an appraiser specializing in your market. An appraiser from another county may not be as knowledgeable as a local representative would be. It would only be reasonable to consider the local appraiser would have more firsthand knowledge of the area. Don’t forget it!
Know the process
Don’t assume that just because you called an appraiser with state certification, that the person appointed to do your appraisal will have the same accreditation.
Oftentimes, appraisers-in-training work together and under the certified individual. If you are satisfied with a trainee doing the work, then this may not be much of a problem. But if you expect the job to be done by a more experienced appraiser, insist on a certified appraiser making the inspection of the property in question and writing the report.
Once that is all squared off, ensure you know your appraiser’s methodologies. The person you choose to do business with may use se in-house databases to compile valuations, or may supplement that data with more generalized information that is available on the market.
Know what you’re paying
The fee of working with a certain appraiser should be a ‘last but not least’ criterion to consider. In this industry, not all products are the same and not all fees charged will be handled in the same way. Make this your last consideration, and take the time to reach out and interview several potential commercial real estate appraisers before making a wise decision. The market is a difficult one and requires an experienced professional to assist you in the valuation process.
At Oxford Commercial Appraisal Management, our fully-licensed and certified commercial real estate management team is dedicated to working with you every step of the way in order to deliver a reviewed, certified, and 100 percent-compliant project from start to finish.
With a team of prestigious, MAI-designated reviewers, you’ll rest easy knowing that your property and the process are in good hands.
Get in touch with the experts at Oxford today; we’re here and ready to help!