How to Determine Actual Market Value of Your Commercial Property
October 4th, 2007 Posted in AppraisalPerhaps the best and some might even say, the only way of determining the actual market value of commercial property it so look at comparable sales which are recent sales of similar types of commercial properties in the same neighborhood or in a similar neighborhood in the vicinity of your commercial property. Such a method is known as market comparison and it is most often used by licensed real estate appraisers.
You can achieve very accurate figures if you used comparable sales to determine the actual market value of your commercial property since theoretically if three similar properties are sold for similar prices, the fourth property would also sell for that kind of price. However, in practice this is seldom the case and this can be attributed to the fact that properties would be of different sizes and also of different ages.
Thus, your best bet would be to make an educated guess and to help you in this regard you should ask for and obtain a ‘Property Profile’ that is available in many states and which documentation provides considerable amount of information about each different commercial property. Thus, you could get information regarding the property such as zoning type, year of construction, lot size, square footage and also comparable sales.
To sum up, you should check out commercial properties sold within the last six months that are similarly located, and then compare apples for apples and also analyze needs such as cost of repairs which should be reflected in the costs.
