When you’re attending or preparing for a commercial real estate appraisal, asking the right questions can help you understand the property’s value, the assumptions behind it, and any potential risks. Here’s a structured list of questions you might ask the appraiser:
Commercial Appraisal 10 Questions
- What appraisal methods will you use? (Income, cost, sales comparison, or combination)
- What comparable properties are you using, and why?
- How does the property’s location and zoning affect value?
- How do current leases, occupancy, and rental income impact the appraisal?
- Are there any physical or structural issues affecting value?
- What assumptions are you making about operating expenses and maintenance?
- How does the capitalization rate apply to this property?
- Are there any environmental, legal, or market risks affecting value?
- Will the appraisal report include detailed income projections and expense breakdowns?
- How can improvements or changes to the property affect its value?
1. About the Appraisal Process
- What methods will you use to appraise this property? (Income approach, cost approach, sales comparison, or a combination)
- How long will the appraisal take?
- What sources of data will you rely on for comparable properties?
- How recent is your market data?
2. About the Property
- How do the property’s location, zoning, and land use affect its value?
- Are there any environmental or legal issues that might impact value?
- How does the condition of the building (age, maintenance, renovations) affect the appraisal?
- Are there any physical or structural deficiencies you noted?
3. About Financials
- How do current leases, occupancy rates, and rental income influence the valuation?
- What assumptions are you making about operating expenses and maintenance costs?
- Are there potential improvements or developments that could increase the property’s value?
- How does the capitalization rate (cap rate) apply to this property?
4. About Market Comparisons
- What recent sales did you use as comparables?
- How do the comps differ from this property, and how did you adjust for those differences?
- What trends in the local commercial market could affect value?
5. About the Appraisal Report
- How detailed will the report be?
- Will it include income projections, expense breakdowns, and market analysis?
- Are there any limitations or assumptions in the report I should be aware of?
- Can you explain any large discrepancies from previous appraisals or valuations?
6. Miscellaneous / Negotiation-Related
- Can we discuss how certain improvements or changes might impact the appraisal?
- Are there any “value drivers” you think we should focus on for financing or investment purposes?
- How often do you update your appraisals in a fast-moving market?
💡 Tip: Be polite but thorough. Appraisers are bound by ethics—they can’t inflate values—but they can clarify assumptions, methodology, and market reasoning.
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