How Is The Appraisal Report Generated?

Once the Commercial appraisals in San Diego County get conducted, the client has many questions regarding the process. One of the most common questions is, “How is the appraisal report generated?” 

Well, once your property is visited, the appraiser will use one to three approaches to evaluate the value of your property. And these approaches are:

1- Cost approach: 

The cost approach is the best method to get an accurate value of the new homes or vacant sites for sales. While using this approach, your appraiser will use the details on labor costs, local building costs, and other few factors to understand how much it would cost to construct a similar property like yours.

However, this approach isn’t reliable for older properties. 

2- Sales comparison approach: 

When your appraiser decides to opt for the sales comparison approach, then he/she will take time to understand your neighborhood in depth. He/she will check the traffic patterns, the nearby throughways, school zones, etc. and determine which aspect is making a difference in the value. 

He/she will also find a comparable property and perform a sales comparison approach using it. This approach is, by far, the most reliable.

3- Income approach:

The income approach is highly considered for income-generating properties. And most Commercial appraisals in San Diego County take an income approach into account. The appraiser determines the current value by taking the income produced by the property into account. After combining the information from all the sides, he will then proceed to create a report that tells the true value of your property.

But again, the final value can fluctuate due to the seller’s motivation or bidding wars. However, the appraised value can be used as a guideline for the lender who does not wish to pay more than what the property costs. 

Bottom line

Well, we are sure that now you know what your commercial appraisal report will contain. However, if you have endless doubts, then see to it that you talk to the appraiser on the spot. Or you can even visit the firm to get a proper insight into the appraising procedure.