Most people in the real estate industry or those looking to buy and sell a property are well-acquainted with what a commercial real estate appraiser does, but there is another question that is not so clearly answered - namely, who is responsible for ordering commercial real estate appraisals . The reason why this confusion exists is because there is no definitive answer and technically, almost anyone could ask for commercial property appraisals to be done. The role of a commercial property appraiser is the same despite their client, but those asking for the assessment to be done could include financial lenders, those that own commercial property, attorneys, or even public agencies that need to determine the value of a given space.
In the case of financial lenders that ask for appraisals the be completed, the reasons are obvious. If a commercial or mortgage bank is about to be involved with a substantial loan, they they certainly want to know that they will be covered in the case that the borrower is unable to pay. In the same vein, an insurance company must have an accurate idea of the property before providing insurance. A value too small could leave the owner in trouble in case of a problem and a too high value could force the insurance company to pay much more than the property is worth.
Of course, the most common person to ask for an appraisal to be conducted would be the current or future owner of the property and it is not uncommon for both sides of the transaction to perform their own valuation to come up with an agreeable price. Like with banks and insurance companies, the reasons are obvious as everyone involved would like to get the most advantageous deal possible. With attorneys, there are several different situations, such as divorce cases, where determining the true value of a property is essential to the division of assets. Similarly, a public agency often needs a best use analysis that figures out whether a commercial property is utilizing its maximum value. The difference between a residential and commercial valuation of a property is drastic and there are firms that specialize in both scopes.
Who Hires a Real Estate Appraiser?