If you’ve been running a business for long enough, you might be coming to a point where you want to sell your commercial property. While you’ve probably sold a house before, selling commercial property is an entirely different game. There are a lot more factors to consider when calculating the value, which you can’t afford to ignore. Here are some things you should know about commercial property appraisals.
First of all, you’ll have a lot more to get through after the inspection. The initial inspection of your property may take a few hours or close to a day depending on the size of the premises. Some business owners, naively, think that this is going to be the entire process. This may be true for residential property, but not when you’re in the commercial arena. From there, your appraisers will look into zoning and public ownership records, local demographics and comparable sales. Little additions like extravagant designs and modern bathroom pods will certainly be factored in. However, there are all kinds of factors which contribute to the value of a property. Getting a hard figure will take several days, so make sure you know what you’re getting into!
The one thing you should never do in the course of an appraisal is misrepresenting the facts. Some people call appraisers professional cynics. If you tell them absolutely anything that could up the value of the property, they’ll be certain to check this information with other sources. In fact, a lot of them have been known to ask questions they already know the answer to, simply to test the credibility of the property owner. Even if there’s a very low chance for litigation in the process, appraisers are trained to defend their work in a court of law. If you twist or misrepresent anything about the property, then you can count on it coming back to bite you in the future!
It’s also a good idea to find out the kind of report you’re getting at the end of the appraisal. In commercial property, there are three main types of report that are drafted from appraisals. The cheapest is a restricted use report. These can only be accessed by the party that ordered the appraisal, which may be you or another business owner. The second type is a summary report. This summarized the collected data and the analysis drawn from it, and can be accessed by any intended user. These cost a few thousand pounds to have done. Finally, there’s a self-contained report. These are even more expensive, and contain far more details than the previous two. You probably won’t have to worry about this last one, as they’re very rarely required. Talk to your appraiser about how you intend to use the report right from the start. They’ll be able to guide you through the best kind for you.
I hope this has made your looming appraisal seem a little less daunting. Do your own research into commercial property evaluation, and you’ll be able to turn your appraisal from a worry to an asset.
