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A commercial appraiser determines the value of commercial real estate and agricultural property, and often must obtain a license to practice. These professionals do not evaluate residential buildings in most cases, unless they also work as residential appraisers or accept the work to supplement their income. Mortgage lending companies, real estate management and investment companies, and other business owners and individuals hire commercial appraisers to provide them with written reports about the properties and estimates of the market values. The main role of the appraiser is to name a price that the property should sell for given the market conditions, which is valuable information to both sellers and buyers of commercial properties. Sellers often use the information to formulate a listing price, and buyers use the information to make offers and to share with lenders if they borrow money to make their purchases.
The appraiser has to collect data from a variety of sources, including comparable properties sold recently in the same area, land records, and local government agencies. Commercial appraisers are trained to use valuation methods to formulate their professional opinions about the values of property, such as the Uniform Standards of Professional Appraisal Practice, which are adopted by the Appraisal Standards Board in the United States. The board approved 20 standards that address how to develop and report values as well as best practices in the industry. A commercial appraiser may also conduct interviews to obtain information not available in the public records or to clarify data. It’s common for appraisers to visit the property, take pictures, and inspect the property in order to write a detailed report.
Many commercial appraisers earn a degree in economics or finance because of the mathematical concepts and computations involved in carrying out their tasks. These majors are not required for individuals who want to become a commercial appraiser, but it’s often recommended and helpful to have an understanding and knowledge of finances. Commercial appraisers can also earn a real estate degree, and some of the coursework often includes economics and finances. For example, an essential duty of a commercial appraiser is to prepare cash flow statements for a buyer and to calculate the return on investment. Appraisers are often hired by banks and investment and financial companies as independent appraisers or salaried employees in order to assess properties and prepare required 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 outside of the office, inspecting property, researching records, and compiling data. Some commercial appraisers are self-employed and work for companies on an independent contract basis.
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