A commercial appraisal is one of the most important parts in the process of purchasing a commercial property. It is a method of land valuation that can help you find out the value of a commercial property before you purchase it. The report is generally prepared by a licensed commercial appraiser and is almost always required by a bank before it closes a loan taken out on a commercial property.
There are three methods by which this can be done. The first method is by comparing the specific property to other properties in the area to find out their value and then using this as a measure of the worth of your property.
The second method is the income approach method, which involves checking the income that the property makes to find out the approximate value of the commercial property.
The third and last method is via the cost-approach method, which is most often used for newer developments. It involves considering the construction cost, the cost of the land, and labor costs to find out the potential property value.
Commercial appraisals generally take a bit longer than residential appraisals, and will also be more expensive due to the difference in value for the developments. This explanation should give you an idea of what commercial appraisals comprise and enable you to find a good commercial appraisal service.