The complexity of the commercial property valuation process can cause various misconceptions to arise in people’s minds. We’re presenting the truth behind 4 common myths that people believe about commercial property valuation in order to help you better understand how this process works.
Myth #1: You Can Withhold or Misrepresent Information To Get a Higher Valuation
Appraisers are professionals at finding out the truth; their job is to independently verify the accuracy of all information they work with in order to stand up to any scrutiny of any intended user. Discovery of any client misrepresentation intended to make a commercial property appear to have a higher value will prompt the appraiser to include disclosures and/or extraordinary assumptions in their report that may diminish the reliability of conclusions in the eyes of other intended users.
Myth #2: Appraisers Can Be Biased and Unreliable
Appraisers have a legal obligation to provide an unbiased value in commercial property valuations. They’re required to follow the Uniform Standards of Professional Appraisal Practice, so appraisers who offer unreliable services risk disciplinary action and revocation of their certification. Appraisers rely on their reputation and credibility to help clients, which is why property valuations are so reliable.
Myth #3: The Commercial Property Valuation Determines the Final Cost
Considering the amount of effort and insight that goes into this process, it would seem as if a commercial valuation conclusion is equivalent to the amount that buyers will pay. In reality, there will likely be negotiations between the buyer and seller reflected in the settled price. Still, having an appraiser give an estimate of the property’s value allows sellers to be much more informed and confident during these negotiations. Further, valuation consulting (apart from appraisal) can assist in developing a negotiating strategy.
Myth #4: A Commercial Property Valuation Isn’t Worth the Cost
Some people believe that they can judge the value of a property on their own or with the help of a building inspector. They fail to understand the sheer complexity of the many calculations, considerations, and judgment that are involved in the process. In doing this, investors risk falling victim to either pricing the property too low and missing out on substantial appreciation, or pricing too high and reducing the pool of potential buyers. They also miss out on the credibility that comes with having an appraiser-supported asking price. In the end, those who pay for a commercial real estate appraisal usually reap more than value those who don’t.
Partner with Willowbrook Valuation & Advisory Services for Your Commercial Property Valuation
At Willowbrook Valuation & Advisory Services, we are a leader in trusted insight, cutting-edge innovation and customer service. We offer exceptional CRE appraisal services and remain dedicated to offering every client the individual valuation service they expect with the capabilities and expertise of a larger firm. To learn more about our valuation and advisory services, please contact us at (202) 919-3888.