When it comes to commercial real estate appraisals, one size does not fit all. Property owners and investors might wonder if they can request a specific valuation method that aligns with their objectives. Understanding the various approaches and knowing when to request a particular one can be crucial in receiving an appraisal that truly reflects a property’s worth. This blog sheds light on this possibility and guides you through making an informed request.

The Trio of Valuation Techniques: Commercial real estate valuations typically hinge on three primary methods: the Cost Approach, the Sales Comparison Approach, and the Income Capitalization Approach. Each has its merits and is suited to different types of properties and investment goals.

Requesting the Appropriate Approach: While appraisers are skilled in determining the most appropriate valuation method, there are instances where you, as the client, might have a preference. For example, new developments often benefit from the Cost Approach, while the Sales Comparison Approach may be more suitable for a property in an area with numerous similar recent transactions.

New Trends in Appraisal Requests: Advancements in data analytics and real estate software now allow for more nuanced approaches to valuation. Clients can request hybrid methods that incorporate aspects of different approaches, leveraging technology for a more comprehensive analysis.

Communication is Key: The foundation for requesting a specific valuation method is transparent communication with your appraiser. Clearly articulate your rationale, supported by an understanding of the property’s market and financial potential.

Conclusion: While appraisers bring their professional expertise to the table, property owners have a say in the valuation process. By understanding the various methods and staying abreast of new valuation technologies, you can make a well-informed request for a specific appraisal approach. Collaboration between owner and appraiser is the keystone to obtaining an accurate and fair valuation, opening the door to successful commercial real estate endeavors.