Frequently Asked Questions
What is an appraisal?
As simply taken from the 14th Edition of the Appraisal Institute’s Appraisal of Real Estate, an appraisal is defined as “the act or process of developing an opinion of value.”
While certain situations and transactions require the completion of a real estate appraisal, scenarios do arise when professional real estate consulting may be warranted, rather than a written appraisal report.
The Cost Approach to valuation analyzes the building costs associated with the real estate improvements, recognizing adjustments such as depreciation and obsolescence. This method also includes the value of the underlying land.
A Sales Comparison Approach to valuation analyzes the sale prices of recent real estate sales transactions, comparing them to the subject property of the appraisal report. Within this method, adjustments may be made for factors such as age, size, location, etc.
With the exception of commercial real estate used for owner-occupancy, most commercial real estate is potentially income producing. The Income Capitalization Approach to valuation analyzes the income stream associated with the subject property of the appraisal and applies market-derived capitalization rates to determine a value for the real estate.
There are two types of narrative appraisal reports, the first being simply an Appraisal Report and the second being a Restricted-Use Appraisal Report. In comparison, the Appraisal Report is more detailed in nature, providing the client with a thorough summary of the appraisal process, including the methodologies employed, their corresponding costs and sales data. The Restricted Use Appraisal Report is less detailed in nature, providing the client with very few details of the data used in the appraisal process to determine the value estimate.
Types of Properties We Appraise
Our office appraises all types of commercial real estate including bare land, office, retail, shop/warehouse, multi-family, restaurant, medical and special-purpose. We also provide valuation expertise in conjunction with estate purposes, right-of-way and condemnation, and litigation.