In commercial real estate, the party who pays for the appraisal usually depends on the context, but typically:
- Buyers: Often pay for an appraisal when they want to know the property’s value before purchasing.
- Sellers: Sometimes pay if they want to set a realistic listing price or attract serious buyers.
- Lenders: Most commonly, if financing is involved, the lender requires the appraisal to ensure the property is worth the loan amount. Usually, the borrower (buyer) pays the appraisal fee, but the lender orders it.
So, in most cases: the buyer ends up paying, but the lender is the one who orders the appraisal.
Here’s a simple table showing who typically pays for a commercial appraisal in different scenarios:
| Scenario | Who Pays | Notes |
|---|---|---|
| Buying a property with a loan | Buyer | Lender orders the appraisal; borrower usually pays the fee. |
| Buying a property without a loan (cash) | Buyer or Seller | Sometimes buyer pays to confirm value; sometimes seller provides an appraisal. |
| Selling a property | Seller | If seller wants to list at a realistic price, they may order and pay for an appraisal. |
| Refinancing an existing property | Owner/Borrower | Lender requires appraisal to confirm value for new loan. |
| Property tax appeal | Property owner | Owner pays for appraisal to challenge assessed value. |
💡 Tip: In most commercial deals involving a loan, the buyer pays, but the lender controls the appraisal process.
Related
What is a commercial appraisal?
Commercial Real Estate Appraisal in Real Estate
Residential Appraisal in Real Estate: Unveiling the Valuation Process