As a business property owner, it is your responsibility to consider certain factors that can affect its value before you buy or sell. After all, every commercial property is different in terms of value, supply, demand, size, location, and other qualities that may affect valuation. So if you are considering a commercial real estate appraisal in Toronto, be sure to have it done by an experienced property appraiser. You can’t go wrong with one of those established appraisal firms that have an extensive track record of providing their services to discerning commercial real estate owners.
If you are new to property appraisal for commercial real estate, here are 10 things that can help you know and understand it better:
1. What it’s all about
Property appraisal services are meant to determine a commercial property’s market value. Think of the property appraiser as a ‘property detective’ who gathers and analyzes statistics, facts, and other crucial information about the property to form opinions on its value.
2. Which buildings are covered
Appraisal firms can assess any type of commercial real estate, including condominiums, apartment buildings, industrial sites, shopping centres, land for sale, office buildings, etc.
3. When it’s necessary
There are many different reasons to conduct a property appraisal, such as to help sellers and buyers identify reasonable selling or buying prices, determine the property’s value for mortgage purposes, tax assessments, and business dissolution. It may also be done to assess damages or help in corporate mergers.
4. It’s not the same as a property inspection
To get your property appraised, you need a property appraiser from a reliable appraisal company. The inspection process is also a part of the appraisal. Appraisers look into ownership records, demographics, rental receipts, zoning records, and other factors to identify the property’s value.
5. A client must order the appraisal
Appraisers are sworn to confidentiality, so if you are not their client, they cannot provide their services and reports to you without the consent of their client.
6. Everything is verified
Commercial property appraisers will look into many aspects about the property. This way, their report may also be useful in legal proceedings and court cases. So, it makes sense for them to ensure accuracy and avoid misinterpreting facts.
7. Your honesty matters
An appraisal company will want to know everything about your property, so avoid withholding any information. Prepare important documents that can help them create an accurate valuation of the commercial real estate.
8. The process varies greatly
Property appraisal services will differ from one project to another in terms of the nature or purpose. However, the basic approach is generally similar, from identifying the intended use, property characteristics, scope of work, data collection, analysis, and formation of opinion.
Note that there are different types of commercial appraisals too, a property appraiser may apply the cost approach, income approach, or sales comparison approach when appraising commercial real estate.
All appraisals must be done by a qualified appraiser, and therefore commercial property appraisals in Toronto are typically done by professionals who are registered with the Appraisal Institute of Canada.