Appraising is an interesting thing. Locally, I know of appraisers to contact if you want a low or high appraisal. I’ve found, that if you tell them how much you want it appraised for, they can usually come up with a rationale to appraise it that high (or low). In my area, residential appraisals run around $250. Commercial appraisals run $500 and up. Talk to real estate agents and see who they would recommend for a high appraisal(I assume you want a high one). They usually know. Good luck!
Commericial Property Appraisal ? - Posted by Cognac (IL)
Posted by Cognac (IL) on November 14, 1998 at 08:45:56:
Hi Gang -
I am in the process of attempting a refinance of a 18 unit building (with a dry cleaning store pick-up only) and I have a couple of crucial questions:
1.) I need a flexible commericial appraiser!! I’m not looking for a crooked one (but if you know any please let me know!) just a person who is not too critical in his evaluation of the property and the area. (BTW - Can someone tell me… what is the differernce between a residential appraiser and a commercial appraiser? My broker is telling me that she is required by the lender to choose a commercial appraiser as opposed to a residential appraiser. Is the commericial appraiser trained or certified differently, is the certification something differennt than MAI ?
2.) How should I go about shopping for an apraiser and how much should I expect to have to spend for the appraiser?
One of my old appraisal instructors gave me this bit of truth when it comes to appraisal assignments. You can have only two of the following three items in an appraisal - GOOD, FAST, CHEAP. You can get a good appraisal done fast but it won’t be cheap. You can get a fast and cheap appraisal, but it won’t be good. You can get a good and cheap appraisal, but it won’t be done fast!
First, there is a difference between a certified appraiser and an MAI. Certification is a form of state licencing, typically two categories - residential and general (all types of properties). The MAI and other “designations”, are awarded by professional organizations, something akin to the CPA in the accounting profession. Federal law requires state certified appraisers to be used for loans issued by a federally regulated financial institution. Based on the property you described, a commercial appraiser would be required. Each state has its own certification regulations, but it is likely called a general or commercial classification in IL. Appraisers are required to be “competent” to appraise the type of property involved - thus a residential appraiser (and some commercial appraisers) may not be qualified to appraise your property. Each bank has a list of pre-approved appraisers, from which you may be able to choose (the bank may also dictate which appraiser to be used). I am an appraisal review officer with a bank, and I maintain a separate list of residential and commercial appraisers. You do not need an MAI and bank’s aren’t supposed to discriminate against non-designated appraisers, although generally speaking MAI’s provide better quality reports. However, they are also typically more expensive. I am an MAI and somewhat bias in my favorable opinion of MAI’s. BE SURE OF THIS - YOU GET WHAT YOU PAY FOR! If you are not dealing with a conventional bank (private financing or pension fund) you have more latitude. I’m sorry I can’t recommend any appraiser’s in your area, but would suggest you contact any commercial bankers or brokers with which you do business, and ask them for recommendations. The Appraisal Institute awards the MAI designation, and they are HQ’d in Chicago. Their web page is www.appraisalinstitute.org. You can get a list of MAI’s in your area there, as well as more information on appraisers and the requirements of the MAI designation. As far as fees, they are very dependent upon each local market. Based on your brief description of the property, and depending on the type of appraisal needed, in our area fees would probably range from $1,500 to $3,000. Good luck!