I am looking at a commercial piece of property for sale.
Spoke with a local appraiser to just get a general idea of property values.
Turns out, he had just appraised this property in the recent past.
How much could he share with me? If I paid him a fee, could he share most all of his findings from the previous appraisal with me? Or would this be crossing some ethical barrier?
It was paid for by someone else. It's not his appraisal, its theirs. He'd be giving you their property. However, anyone can hire an appraiser so likely he'd just dig out his findings, duplicate the appraisal, and charge you full price.
It was paid for by someone else. It's not his appraisal, its theirs. He'd be giving you their property. However, anyone can hire an appraiser so likely he'd just dig out his findings, duplicate the appraisal, and charge you full price.
Pretty much sums it up.
Appraisal may be the same, or close depending on recent sales of comparable property in the area.
If the guy would sell you the previous appraisal under the circumstances you mentioned, I would not trust him anyway, and seek another certified appraiser.
It was paid for by someone else. It's not his appraisal, its theirs. He'd be giving you their property. However, anyone can hire an appraiser so likely he'd just dig out his findings, duplicate the appraisal, and charge you full price.
Pretty much sums it up.
Appraisal may be the same, or close depending on recent sales of comparable property in the area.
If the guy would sell you the previous appraisal under the circumstances you mentioned, I would not trust him anyway, and seek another certified appraiser.
If he did the appraisal with in a reasonable time <90 days, I don't see a problem. If he tries to sell you the same appraisal 6 months later, that is an issue.
What I should have asked if there was a reasonable and ethical way for him to do a brief "drive-by" appraisal? I wasn't asking, nor expecting the appraisal to be given to me.
But on that note, would it be acceptable for me to approach the guy that paid for the appraisal and offer to buy it from him? Appraisal was completed this past winter, I believe.
In some states the county tax appraiser and the market value can differ greatly. Florida is a good example. If the appraisal is more than 6 mos old you sure want it updated as much can change if your market is hot. Your county appraiser might have recent sales you can look up if you know about them. But unless you know a lot about commercial properties you might have trouble adjusting values. I would be suprised if he agrees to a drive by appraisal. If he takes a dime from you he is subjecting himself to liability for what he has done. If he is worth a crap even if he has already done one recently he will check for recent sales. If he is not worth a crap then his first appraisal may not be either. Consider that. Im not an appraiser but I have been a full time commercial broker in Florida since 1986. So believe me , i have seen some crap. Even got some on me.LOL.
Our county tax assessor showed up last fall for a look at our place. They hadn't been here since we built it in '95 and they didn't know about the added garage, shop, fencing, barn, orchard, etc. even though it was all done with the proper permits. Luckily, state law says they can't increase taxes more than 3% in a given period so the increase was minimal. I expect it'll catch up over time. A couple months later we had it appraised as we were thinking of selling. The appraisal is double the assessment. That's about normal here.
All that really matters to the county is the relative values among properties, not necessarily the actual values. They will adjust the tax rate to get the desired revenues no matter how low or how high the appraised values are.
The county here does NOT adjust any rates, at least not the appraisal district.
But here in TX the appraisers must be held to a much higher standard than other areas.
Tax rates here have held basically flat for long periods of time as its not popular to raise the rates.... hence the valuation has to stay current for there to be any increase of tax income.
It sounds like Texas is a lot more stringent in its tax appraisals. Here in NC counties are required to update the values every 8 (?) years, but the revaluations are done en masse, so the accuracy for any one parcel may be off by quite a bit.
If this is commercial property for sale, then are you looking at it as an income property, or as a site for your own commercial activities?
Because the answer to that question changes the way (IMHO) you would think about the value of an appraisal. If it's the latter (you're going to use it, not rent it), then okey-doke, go ahead.
But if it's the former, though (you're looking at it for rental income), then I'd think you would calculate an offer price based on the anticipated cash-flow potential, kinda (not totally, but kinda) regardless of the appraisal.
They have been coming after us HARD for property taxes. Broke, mismanaged city = 20% increase in the last 2 years. I fought it, and it ended up being about a 12% increase. They'll be back at it next year I'm sure. I told them that I would sell my house today if I could get what they wanted to value it at. They just stared at me.
Here in mn and wi for that matter, the tax bill is ALWAYS considerable less than the appraisal. With the his ass taxes here you don't want them to be close. The only time it was right on was when we built our house and the taxes were the property value bfore the house was built. The next year the house was finished and the assessment was the appraised value.
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OR that you could legally get away with not declaring all that you add every year.
If this is commercial property for sale, then are you looking at it as an income property, or as a site for your own commercial activities?
Because the answer to that question changes the way (IMHO) you would think about the value of an appraisal. If it's the latter (you're going to use it, not rent it), then okey-doke, go ahead.
But if it's the former, though (you're looking at it for rental income), then I'd think you would calculate an offer price based on the anticipated cash-flow potential, kinda (not totally, but kinda) regardless of the appraisal.
Yep, the income based valuation method... NOI/CapRate = value.
But, I thought Tarkio was the expert on purchasing RE without assistance. So, why is he here asking RE 101 questions?
In larger areas where there is a lot of commercially zoned land and buildings it would be difficult for the county to do full blown appraisals on every property. Commercial properties are not like residential properties where sales comps are more homogenous. Since appraisals are based on sales that occured in the past they may not reflect actual market value. Especially if prices are increasing or decreasing rapidly. So tax assessed value, appraised value and market value can often be different numbers. During the crash I had to deal with high appraisals that banks where supplied with by local appraisers that were no where near what the commercial properties were going to sell for because they were based on sale comps in a declining market.
Tarkio, Couple questions: 1. Why are you needing the appraisal? If it's for your own decision to buy or not buy, do your homework and look at NOI's/ROI's and what you think what monthly/yearly income this property can produce with proper management. FYI, there's no harm in asking to look at current owner's "appraisal". In our great state of FL, appraisals are kinda like a'holes.. Everybody's got one. Nuff said there. On to next.
2. If it's for insurance purposes, welcome to my nightmare. If the property is in FL, usually the county govt's appraisal will almost always favor you and be your friend. Theirs are based on taxable value. Additionally, many county sites have a "comps" page clickable with their assessments to support your value assertions to the insurance company of "last resort", (aka Citizens), who are always trying to phfuck you. They are state affiliated with our fair haired/no haired governor Rick/Dick Scott who claimed the 5th no less than 57 times under oath. Kinda' gives you a warm, fuzzy gooey kinda' phfukkin feelin' about our current state govt, doesn't it?? My current conflict is on a rental property I own that Citizen's feels is valued at $220K. The fallback presented to me by my "new" agent (won't go there for now), is $171K. Both estimates are ridiculous, in my opinion, so I presented multiple free internet appraisals last night to him ($149K). We'll see.
3. If it's to beat down the current owner's price, don't waste your money or his. just tell him how you can help him with HIS problem and what it's going to take for YOU to bring the property up to snuff and profitable. If they're motivated, then that'll be it. If not, go on to the next one. I'm really not looking to buy any more property here in the south of south, so my advice/attitude may be skewed. I just know the ropes better than I'd like to at this point. When it comes to knowing how to deal with Citizens lately.. I know that real good.
If this is commercial property for sale, then are you looking at it as an income property, or as a site for your own commercial activities?
Because the answer to that question changes the way (IMHO) you would think about the value of an appraisal. If it's the latter (you're going to use it, not rent it), then okey-doke, go ahead.
But if it's the former, though (you're looking at it for rental income), then I'd think you would calculate an offer price based on the anticipated cash-flow potential, kinda (not totally, but kinda) regardless of the appraisal.
Yep, the income based valuation method... NOI/CapRate = value.
But, I thought Tarkio was the expert on purchasing RE without assistance. So, why is he here asking RE 101 questions?
Scott
Boy, the butt-hurt is large with you isn't it?
Dang son, you are showing you're lack of security with your chosen profession aren't you?
BTW this is part of a business I'm looking at buying so return on CAP rate isn't what I'm looking for.