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There is a lot of information to digest when it comes to the subject of real estate - what’s the best location, is there enough space, can I afford this? With all the important details to digest, sometimes the notion of an appraisal may slip your mind. Appraisals are a key component of real estate transactions - whether you are selling, refinancing, or simply establishing a mortgage. Appraisers offer an unbiased opinion on the building’s value and verify the property’s worth for potential financing. Appraisals can be complicated matters, however you can simplify the matter by preparing the necessary documents that your appraiser will require.
What your appraiser needs from you will depend on the type of property you are having appraised. Today, the focus will predominately be on the commercial real estate sector, breaking down what you should have prepared, depending on your property type.
Appraisals in the commercial sector
An appraiser is much more subjective in nature in the commercial real estate sector than the residential sector. Underlying assets are a much larger component in the residential market, whereas the commercial appraiser assesses the price solely on the market support.
Appraisers offer an intensive analysis of the local market and provide you with the valuation of the quality, value or utility of your property based on the local market. Appraisers are looking to verify all facts, so make sure the information you provide them has all the right details and doesn’t leave anything out. Don’t undermine your own credibility by trying to withhold facts.
What will your appraiser need?
There are certain documents that will be required regardless of your property type:
- Property tax bill (You can request of copy from your city if you do not have one).
- MPAC (Municipal Property Assessment Corporation) statement (Everyone is mailed a copy, if you have misplaced yours, you can request one from MPAC directly).
- History of the property (You as the owner are the story teller).
- Set of drawings of the property.
- Site plan (Not everyone has one, however if available, it is extremely helpful to your valuation).
- Financial statements.
There is further documentation required, depending on which type of property you are having appraised:
- Copies of leases (if the property is rented).
- Planning documents (e.g. only applicable if you, the owner, have changed or are in the process of changing the zoning).
- Historical financial statements; revenues and expenses (applicable to investment properties).
- Building plans (if applicable).
- Development sites require a soil study report, geotechnical reports, as well as environmental reports.
Why appraisers need this documentation
An appraiser will help you determine the value of your property and by providing them with the appropriate documentation; you are providing your appraiser with an indication of the actual performance of your property. If you are looking to have your property appraised and would like extra information on what documents you should have available, connect with an appraiser today.
