A commercial appraisal should be completed in three to four weeks. However, the process, in reality, takes a longer time. Well, this hinders the lender from doing other tasks and reduces the overall productivity of the organization. Time to get rid of the problems associated with commercial appraisals. Let’s have a short read to understand how to speed up the process.
Common Problems in Commercial Appraisals
When the borrower becomes insolvent, the property is sealed by the lenders. That property needs to be sold to recover the debts. Valuation of the property contains many challenges, which result in unnecessary delays. In this post, I have shed some light on the problems which need to be tackled on time.
➤Contacting the Person who has Some or no Knowledge
Lenders need to perform two things- firstly, they need to have the correct description of the property. Secondly, look for an experienced or professional who can perform the entire process adequately. It’s important for the bank to understand what person is going to perform the role in commercial appraisal. Choosing the wrong person is one of the enormous mistakes that banks make. You can look for a broker or and a third-party company offering this incredible service.
➤Dealing with Certified Appraisers
The one who is doing the commercial appraisal must conduct in-detail research that supports the conclusion on the value. Here, one may walk through public sale records and past deals. This process again is quite complex as you gather information from the third party, and they refuse to share information or don’t attend the calls. But hardly any people say no to qualified appraisers. Their certification and experience come to the rescue and save a lot of time. They are well aware of the teams and know how to utilize the info of the city, region, recent government guidelines, etc.
➤Delays in “As Complete” Opinions
Banks generally request “as complete” opinions in case new construction or renovations are planned for the foreclosure property. Here, there are more chances of delays due to final plans, project cost, specifications, etc. The appraiser needs to ensure to decide a date that makes the process run according to the delivery date.
Making the Commercial Appraisal Process Faster
Accelerate the speed of the process by following two crucial steps:
- Make sure not to delay the initial process, such as submitting documents with a delay. This will knock down the entire process.
- The appraiser should be certified and have a good experience.
Some relevant documents most appraisers ask lenders or original owners to submit :
- Site plans
- Building drawings
- Leases
- Rent rolls
- Tax information of some years
- Three years of operating expenses & income statements
- Intended use of asset
- Pro forma expectations, etc.
An appraiser should have these documents handy and keep the extra copies as they may require during the commercial appraisal process.
Ending Views
A commercial appraisal is a critical task which many lenders avoid performing. That’s why lending institutions have outsourced this service to professional hands. Therefore, increase the processing speed.
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