Commercial Valuation Division - www.OCcommercial.net
Provided on this page is cursury information on Pettifer & Associates, Inc's commercial and investment property capabilities. Our commercial appraisal division can be accessed directly at www.OCcommercial.net. A No Cost Fee Proposal on any type of commercial property can be requested at our affliated commercial appraisal web location.
OCappraiser.net and OCcommercial.net together provide almost an all-inclusive property capability with a broad spectrum of appraisal reporting formats that are all compliant with the Uniform Standards of Professional Appraisal Practice (USPAP). There is much discussion and disagreement amongst commercial appraisers on the appropriate report format and the development of the appraisal for a specific assignment. Some appraisers have misinterpreted USPAP guidelines and complete the same level of report on every assignment, resulting in an appraisal that sometimes contains excess cost and boilerplate not necessary or wanted for an assignment. On the other end, many appraisals lack the detail and local market analysis narrative necessary so users can make accurate and intelligent decisions. Even experienced appraisers have admitted to not understanding the two types of appraisals than can be prepared by a licensed appraiser. The confusion of some appraisers is heightened because there are also three reporting formats for each appraisal type. Displayed below are the three types of appraisal reporting formats. The three appraisal formats can be used in conjunction with a Limited Appraisal or a Complete Appraisal.
USPAP defines two types of report development. Technically speaking, a Complete appraisal is one that does not invoke the "Departure Rule" of USPAP. Complete Appraisals are usually necessary for mortgage loan transactions,
Limited use appraisals invoke one or more USPAP Departure Provisions. Limited Appraisals can be a valuable tool for making quick buying /selling decisions and mortgage financing with low loan-to-value ratios. Generally, Limited Appraisals are appropriate reports for the internal use of the client and no other intended uses. The level of reliability of a limited report can vary, but can be a valuable tool for specific clients real estate needs and used the right conditions. If the client is familiar with the property, ordering a limited use appraisal will result in a more reasonable cost and shorter turnaround
Are you with us so far? Don’t be anxious about understanding the connection to development, format, departure rule, limited, complete, restricted, summary and self-contained. OCappraiser.net will honestly recommend the most appropriate appraisal and reporting format for the intended use and potential users. Please contact our office if you have any questions or need additional explanation on the most appropriate appraisal type and format.
The combinations of appraisal development and reporting options are displayed below. The major difference between the Self-Contained, Summary, and Restricted Use appraisal formats is the level of data contained and reported to the client.
Of the appraisal report options above, Format Three would represent the least detailed report, lowest price format and would only be appropriate for a limited number of users or for bank internal use only. Format Four represents the most detailed narrative report option, most costly report format, comprehensive analysis is not necessary for most assignments with a limited number of users willing to pay the costs for an appraiser to prepare a Complete, Self-Contained Appraisal.
The most common type appraisals prepared by commercial appraisers is Format Five, a Complete Appraisal in a Summary Format. Approximately 75% of our appraisals are Summary Narrative Reports. A Summary Report can cast a wide shadow amongst appraisers. Some appraisal firms define “Summary Appraisals” as reports with very little detail to the point that the user is provided with the value opinion, sale comparables and justification of the appraisal process. Many summary appraisals OCcommercial.net has reviewed contain such brief commentary, diluted analysis and useless boilerplate that there is the question if the report provides the user any insights other than the bottom line value. For some assignments that might be acceptable. However, www.OCcommercial.net's clear focus is to provide our clients with added value analysis and solutions to real estate problems, not just opinions of value.
Our firm’s summary reports often contain the detail that would normally be contained in our competitor’s Self-Contained Appraisal Report. OCappraiser.net appraisers do not limit their analysis due to the format type described in the engagement letter. If the appraisal requires an expansion of our analysis to provide the client with the information necessary for them to make intelligent and forward thinking real estate decisions. Consequently, our summary appraisals are closer in depth to self-contained appraisals in the sections of the report that are critical to market forces impacting value.
Summary commercial reports can be both form reports and narrative appraisals. Apartment building appraisals are prepared on the industry standard FHMLC 71A and 71B Apartment Forms. Larger complexes and mixed use apartment / retail properties can be developed in a narrative format.
We complete small commercial owner-user and investment property with several tenants on the UCIAR Commercial Form or a condensed narrative. These appraisals are often non-complex properties for SBA financing. Our preference for commercial property appraisals , other than the most non-complex properties, is to develop narrative appraisals. The majority of assignments can easily be developed in a Summary narrative format. Complex properties or institutional quality buildings are usually developed with the detail as Complete, Self-Contained Appraisals. Large multi-tenant investment property can be developed as Summary or Self-Contained Appraisals depending on the intended use. The remaining 25% of our commercial appraisals is a mix of Self-Contained and Restricted Appraisals. Restricted appraisals can be an option for assignments that have one well informed intended user. A lower cost restricted appraisal is often a good option for sellers wanting to determine a reasonable listing price or for assisting buyers in sale price negotiation or buying decesions. A Restricted Appraisals are often the best valuation product for clients needing a bottom line value opinion or range of value and they need it
Most appraisals for small business and SBA lending or reports for non-complex properties purposes can be completed in a condensed narrative format as a Complete or Limited Summary Report. In order to comply with all USPAP and FIRREA requirements it’s recommended that more complex properties, major multi-tenant investment and Special Purpose properties be developed as Complete Appraisals with all appropriate approaches and methods considered. The fees stated below are ranges and can vary depending upon the specific property and intended use. The most reliable and economical Format for most non-complex properties is a Summary Appraisal that can be completed for approximately $2,500 to $3,500. Investment property and larger multi-tenant buildings reflect a range of fees starting at $3,500. Special Purpose, Mixed Use and difficult and unusual assignments can exceed the range of fees listed and proposals provided only after preliminary research. Please call for a quote so we can provide the most cost effective, accurate and level of detail that is most appropriate for the intended use.
The above fees are general ranges and can vary greatly depending the geographical area and distance, property complexity, and the inclusion or exclusion of any approaches to value (departure). Mortgage loan appraisals will usually be at the lower fee range. Please call for a quote on unusual properties, new construction and rush jobs. More complex assignments and commercial properties can reflect higher fees. Simple commercial properties are sometimes quoted below the typical range. Vacant commercial land and more difficult commercial assignments that may opposing parties, divorce settlemnt or possible litgiation necessitate higher fees than typical mortgage loan appraisals. Please go to our affiliate site www.OCcommercial.net for more information on commercial assingments.
Scott Pettifer, MAI, SRA