A commercial appraiser determines the value of commercial and agricultural real estate, and must often obtain a license to practice. In most cases, these professionals do not evaluate residential buildings unless they also work as residential appraisers or accept the work as a side job. Commercial appraisers are hired by mortgage lending companies, real estate management and investment companies, as well as other business owners and individuals, to provide written reports on properties and market value estimates. The appraiser’s main job is to determine what price the property should sell for in light of current market conditions, which is useful information for both sellers and buyers of commercial properties. Buyers and sellers both use the information to make offers and to share with lenders if they borrow money to make their purchases.
The appraiser must gather information from a variety of sources, including recent sales in the area, land records, and local government agencies. Commercial appraisers are taught how to use valuation methods to form professional opinions about property values, such as the Appraisal Standards Board’s Uniform Standards of Professional Appraisal Practice in the United States. The board approved 20 standards that cover how to develop and report values, as well as industry best practices. Interviews may be conducted by a commercial appraiser to obtain information not available in public records or to clarify data. In order to write a detailed report, appraisers frequently visit the property, take pictures, and inspect it.
Because of the mathematical concepts and computations involved in performing their duties, many commercial appraisers obtain a degree in economics or finance. These majors are not required for those who want to work as a commercial appraiser, but they are frequently recommended and helpful. A real estate degree is also available for commercial appraisers, and some of the coursework often includes economics and finance. A commercial appraiser’s primary responsibility, for example, is to prepare cash flow statements for a buyer and calculate the return on investment. Banks and investment and financial companies frequently hire appraisers as independent appraisers or salaried employees to assess properties and prepare required financial statements for inclusion in their reports.
Individuals who want to work as commercial appraisers must have good time management skills and the ability to work independently. They frequently work outside of the office, inspecting property, conducting research, and compiling information. Some commercial appraisers work for companies on a contract basis and are self-employed.