What a commercial appraisal is
It is a written opinion of the value of property used for business or income, such as a shop, office building or apartment property above the residential scope. It names the property, the date, the purpose and the users, and it shows the evidence. For income property the evidence usually includes rents, expenses and leases as well as comparable sales.
How it differs from a home appraisal
A home is valued mainly by comparing it with similar homes that sold. A commercial property can also be valued by what it earns or what it would cost to rebuild. The Interagency Appraisal and Evaluation Guidelines, written in 2010 for federally regulated lending, say an appraisal must include any approach to value that is applicable and necessary, whether cost, income or sales comparison, and reconcile them. That is a lending context, but it shows that more than one method can matter.
Who may appraise it
California's license classes set the line. The Bureau of Real Estate Appraisers documents that a Certified Residential appraiser may appraise non-residential property up to a $250,000 transaction value, and that a Certified General appraiser may appraise all property types. Randy M. Sonns runs a residential practice, and his site says that for a commercial appraisal you should get in touch and that he can connect you with a skilled local appraiser who has commercial-specific experience.
How to start
Gather the address, the property type and any leases or rent roll.
State the purpose and who will rely on the report.
Give the date the value must apply to.
Ask who will perform the work and what license class they hold.
The page on other property appraisals sets out the same steps.
Frequently asked questions
Can a home appraiser value a duplex or fourplex?
Yes, one-to-four unit residential property is within the residential class scope.
What about land?
Land value looks at comparable sales, access, topography, size and location. Ask whether your parcel can be handled directly.
Do I need an appraisal to sell a commercial property?
That depends on the buyer, lender and contract. Ask the party relying on the value.
Who do I call first?
Call and describe the property. Randy will say whether he can help or point you to a specialist.