Appraisers are divided into two categories for licensing purposes, residential and commercial. Some, not many, are licensed to appraise in both categories but most choose to work in one category or the other.
Residential appraisers are restricted to a fairly narrow range of properties but are well suited for most residential assignments.
Commercial appraisers are allowed to appraise residential and commercial property with no restrictions as to dollar value of any kind.
Designations: A number of trade associations for appraisers exist to promote education and professionalism. Many very good appraisers are designated and many very good appraisers are not. On its own, the designation itself is meaningless.
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USPAP: Uniform Standards of Professional Appraisal Practice is a body of rules and requirements that all appraisers must adhere to. The FREAB or Florida Real Estate Appraisal Board enforces USPAP in Florida.
Most commercial RE appraisers work for commercial banks as independent-contract-appraisers in the area of mortgage loans. Banks typically loan say 80% of the appraised value or 80% of the purchase price, whichever is less.
Competency: Ask the appraiser if he or she has appraised any property similar to that of what you need appraised. Ask bank loan officers for referrals. It's possible for example, that a competent hotel appraiser might not know anything about the appraisal of restaurants and vice versa.
Time: Two weeks is the typical time required to complete an assignment since the appraiser has one weeks worth of work to complete before starting on your new assignment.
Estate Appraisal for IRS vs Mortgage Loan Appraisal
For the first type, you can order your own, for the second type, the bank must order it for you.
Cost: A small owner-occupied office condo could cost as little as $900 while a larger, multi-tenant office building could cost around $3,000. Non-bank customers must typically pay the full fee in advance.
Big vs small shop: National companies such as CBRE and Cushman & Wakefield are good choices for larger properties such as regional malls, large apartment complexes, etc.
For smaller properties of say under $1 Million, smaller shops will often offer a lower fee with the same work quality as the larger shop. Ask for a "Sample" report.
PDF: Ask if the appraisal will be in a PDF format along with the typical "hard copy". Ask how many hard copies are included in the price before additional charges apply for extra copies.
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Dan Peele is the founding member and major shareholder of Central Florida Appraisal Consultants in Longwood, FL.
Mr. Peele, ASA, has been active in central Florida real estate since 1984 and is a licensed State Certified General Real Estate Appraiser, RZ 887.
www.CFAppraisal.com or 407-862-8405 or dan@danpeele.com
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