So, you are getting ready to request an appraisal on a potential commercial property deal but have a few questions before you decide on what appraisal company to use. We’ve compiled the top six most frequently asked questions about our industry and appraisal reports so that you can navigate the appraisal world with ease. Let’s jump straight into it.
What is the Role of the Appraiser?
The appraiser’s role is to provide arm’s length, third-party, neutral, and impartial opinions about the value of a real property and provide assistance to those who own, manage, sell, invest in, or lend money on real estate. As appraisers’ we assemble facts, statistics, and other information on a specific property. We then analyze the data and develop opinions of value.
What Standards are Appraisers Required to Comply With?
Some of the standards appraisers are required to comply with include:
- Uniform Standards of Professional Appraisal Practice (USPAP) – are considered the quality control standards applicable for real property.
- FIRREA and Bank Guidelines
- Interagency and Evaluation Guidelines
- SBA Appraisal Requirements
What Qualifications Should I look for in an Appraiser/Appraisal Company?
All appraisers are required to be state-licensed/certified. You can request information on their education level, licensing & associations, and the type of properties they have appraised in the past. You can find your state regulatory agency here to learn more.
What Does MAI Mean?
MAI is a designated member of the Appraisal Institute. An MAI shows that the appraiser has the highest level of accreditation in the industry. They accomplished rigorous education and experience requirements and are held to strict standards of code and professional ethics.
What Items Will I Need to Provide for an Appraisal?
To receive a fair and accurate appraisal, it is helpful to provide these listed items:
- Site and Building Details
- Title work
- Environmental Information
- Purchase Agreement
- Income Information
- Arm’s length vs. related party leases
- Historical Income & Expense Statements – Verify the owner’s consolidated statements match up with tax returns
- Signed lease documents, detailed rent roll, etc.
- New construction or planned renovations – Actual construction cost statements, plans, material specifications, etc.
What is a Standard Turn-around Time for a Commercial Appraisal?
Providing an in-depth and accurate appraisal report can take many hours to complete. Here at Simonson Appraisals, we do our best to have a 3-4 week turn-around time because we understand the appraisal process will provide you with the confidence to make the correct business decision for your needs.
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Have more questions about our industry or the appraisal process? We’d be happy to help. You can use our contact form to ask your questions or if you would like to talk to one of our appraisers, call us at 612-618-3726.