How to Speed up the Commercial Real Estate Appraisal Process

Real estate appraisals are commissioned when investors take professional help to establish the market price of a property they are purchasing. Lenders may also seek a qualified commercial real estate appraisal before they issue a loan to an investor in order to gain an insight into the present and future potential value of a property. Appraisals typically take around 3-4 weeks once the work has been agreed to. However there are various aspects that slow down or derail the appraisal process.  If speed is what you are looking for in an appraisal from a real estate appraisal company there are certain aspects you must keep in mind and you must do to help out the appraiser.

The top-most factor contributing to a delayed appraisal is poor communication and it can come in many forms including incomplete information, late information, or even inaccurate information.

Here’s how to accelerate the Commercial Real Estate Appraisal Process

As the borrower, provide all documentation the appraiser will need, clearly stating the intended use or plans for the property once work begins. This documentation will help the appraiser finish the written report which is based on factual data about the property and includes building drawings, property income statements, leases, rent rolls, and tax information. Providing this information is not difficult for the borrower as it would be the same information he has furnished to the lending institution. If the borrower is unhurried to provide information, even if it is accurate, the appraiser will not be able to submit the written report on time.  

One must also avoid providing the appraiser with faulty information like outdated financials or other material about the property that is not correct. Information submitted to the appraiser must be the latest to reflect an accurate picture in the appraisal. Absent information which is later realized, will unnecessarily cause delays. If the change is so significant, the appraiser may start over completely with his analysis.

Delays in a commercial real estate  appraisals can happen if the appraisal assignment includes an “as complete” opinion such as when renovations or new constructions are involved, delays in obtaining final plans, specifications, project costs, time table for completion, etc., causing significant delays. When only initial plans/specs/costs are available and they can change in due course, information will need to be updated which can put the appraiser’s schedule in conflict with promised delivery dates on other projects.

In short, borrowers must try to be on top of the appraisal. Preparedness is key to the speed up of a Commercial real estate appraisal.

• Provide the appraiser relevant, accurate and up-to-date information.

• When the appraiser asks a question, respond the same day and provide clarifications or anything that is requested.

In closing, appraisers from a real estate appraisal company work on multiple projects at a time, making commitments to tight delivery timelines in order to land assignments in this fast-paced business environment. They estimate on the duration of every assignment. So committed project delivery dates can overlap into the mix if current assignment are stalled for any reason(s).  Appraisers are paid a flat fee, not on a contingency fee basis, and are thus already motivated to complete more appraisals in order to earn more money.  Appraisers, users of appraisal services, and market participants would benefit with a higher volume of better quality appraisal reports being delivered in a timely fashion. So common pitfalls that can delay the completion of a commercial real estate appraisal must be avoided.