What Do Commercial Land Appraisals Contain?
According to the Appraisal Institute, an appraisal provides an objective analysis of all the factors that comprise the value of a property. The reasons clients request a commercial land appraisal vary, so the appraisal defines the purpose and use for the report. The report's function dictates the type of procedures the appraiser employs to reach an opinion of value.
Other People Are Reading
-
Function
-
The scope of work briefly outlines the processes the appraiser uses to develop his opinion of value. Land evaluations include physical inspections, research into easements, leases, special assessments, zoning and other data pertinent to the property. The commercial appraisal report summarizes the appraiser's conclusions based on this research.
Features
-
A commercial appraisal evaluates the highest and best use for the land. For example, the appraiser might conclude that a parcel in a residential neighborhood will achieve its maximum productivity if it is developed as an apartment complex. Building a grocery store might achieve higher land valuation, but zoning restrictions make an apartment building the best legal use for that parcel.
-
Types
-
The value of commercial vacant land is evaluated by two valuation methods. The comparable sales approach analyzes similar properties that have recently sold, adjusting for differences in the location, features and other aspects of the parcel. The income approach analyzes the revenue the property could generate if it is developed.
-
