Commercial appraisers determine the value of commercial and agricultural properties using data from various sources. They use valuation methods to formulate their professional opinions and prepare detailed reports for clients. A degree in economics or finance is recommended, and effective time management skills are important.
A commercial appraiser determines the value of commercial real estate and agricultural properties and usually needs to obtain a license to practice. These professionals do not appraise residential buildings in most cases unless they also work as residential appraisers or accept the job to supplement their income. Mortgage lending companies, real estate investment and management companies, and other business owners and individuals hire commercial appraisers to provide written reports on properties and estimates of market values. The appraiser’s primary role is to name a price at which the property should sell, given market conditions, which is valuable information for commercial property sellers and buyers alike. Sellers often use the information to formulate a listing price, and buyers use the information to make offers and share with lenders if they borrow money to make their purchases.
The appraiser should collect data from a variety of sources, including comparable properties recently sold in the same area, land registries and local government agencies. Commercial appraisers are trained to use valuation methods to formulate their professional opinions about property values, such as the Uniform Standards of Professional Valuation Practice adopted by the Valuation Standards Council in the United States. The board approved 20 standards that address how to develop and report values, as well as industry best practices. A commercial appraiser may also conduct interviews to obtain information not available in public records or to clarify data. It is common for appraisers to visit the property, take pictures and inspect the property to write a detailed report.
Many commercial appraisers major in economics or finance because of the mathematical concepts and calculations involved in performing their tasks. These courses are not mandatory for individuals who wish to become a commercial appraiser, but it is generally recommended and helpful to have an understanding and knowledge of finance. Commercial appraisers can also earn a degree in real estate, and some of the courses often include economics and finance. For example, a core duty of a commercial appraiser is to prepare cash flow statements for a buyer and calculate the return on investment. Appraisers are often employed by banks and investment and finance companies as independent appraisers or salaried employees in order to appraise properties and prepare the necessary financial statements to include in their reports.
Effective time management skills and the ability to work alone are important for individuals who want to become commercial appraisers. They often work out of the office, inspecting properties, researching records and compiling data. Some commercial appraisers are self-employed and work for companies on the basis of independent contracts.
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