When it comes to having an appraisal done for a property, there are a few key differences between getting a home appraisal or a commercial appraisal. Before any appraisal is done, it is important to understand the differences between the two types of properties. ‘Home’ or ‘residential’ means that there will be people always dwelling in the property, while ‘commercial’ means that the property will be used exclusively for business purposes and to make a profit in some way.
Below, we’ve broken down a few of the key differences between commercial appraisals and home appraisals.
The Length of Appraisal Report
An appraisal generally begins with a walk-through of the property, whether that property is residential or commercial. While the walk-through itself doesn’t take much longer than a few hours, there are lots of factors that must be taken into consideration, especially for commercial properties. A commercial appraisal often looks at things such as the overall size of the property and what it’s being used for. Because of this, a commercial appraisal report is typically longer than one done on a residential property.
The Time Spent on an Appraisal
Because commercial properties typically have more factors that need to be taken into consideration during an appraisal, they will often require more time. Some of the factors that must be considered include utility costs and income streams, which will differ from property to property, and make each assessment more unique. Any unique features of the commercial property will also need to be inspected and taken into consideration.
A residential property appraisal will often take less time than a commercial appraisal, and the appraiser will look at several different elements including:
- Physical characteristics of the property, including the main dwelling as well as outbuildings.
- Interior and exterior finishes and systems, such as heating and cooling
- The quality of any improvements that have already been made to the property
- Any repairs or improvements that need to be made
The Cost of the Appraisal
As stated before, the appraisal process for a commercial property usually takes more time than that of a residential property and does mean a commercial appraisal can be less affordable than that of a residential one. This is also the biggest difference between a commercial appraisal and a residential appraisal.
Additionally, it’s important to remember that the role of a residential appraiser is different than that of a home inspector. An appraiser has to be accredited, as they are not just inspecting the property, they are valuing all its assets and compiling a report on their findings (which may even be used in a court setting).
Whether you are looking to have a commercial or residential property appraisal done, you can rest assured that your appraiser will take every aspect of your property into consideration when building their report to give you the most accurate appraisal possible.