Frequently Asked Questions
Appraisals can seem intimidating, but they don’t need to be! Our team at Horizon Commercial Appraisal is always open to help guide you in the appraisal process. Below are some of our frequently asked questions by clients. If you don’t see an answer here, please feel free to get in touch with us HERE.
What is an appraisal?
A determination of the value of a given piece of commercial real estate by a certified appraiser utilizing the following three approaches: cost approach, sales comparison approach, and income approach. The appraiser determines which approach(es) is/are most relevant and appropriate in the valuation of the subject property and meet the needs of the client. The report is an unbiased opinion and must include supportable and defensible information to lead the client to the reasonableness of the appraisal conclusions and not be misleading in any way.
Appraisals are usually sought by financial institutions and individuals for various reasons such as but not limited to; refinancing, loan underwriting, and internal planning. They are also useful to commercial property owners who need help with understanding the values of their properties.
Why do people need commercial appraisals? When should I start engaging an appraiser?
There are a multitude of reasons why someone might need an appraisal of their commercial property.
The most well-known need for commercial appraisals is for new loans. However, there are many other situations in which an appraisal is required.
These include but are not limited to:
- Estate planning
- Refinancing
- Loan underwriting
- Death
- Internal planning
- Partnership buyout
- Purchasing a building
- Acquisition
We would strongly encourage that if you are privately (not working with a financial institution) looking to move forward with an appraisal for any of the above reasons to seek out an appropriate appraisal firm and request a quote for their cost and timing for your appraisal. Remember appraisals are continuously being requested and the sooner you make the decision to move forward with an appraisal firm of your choosing, the better your chances of getting the appraisal in a timely manner for a reasonable cost. If you wait until the end of the year during the holiday seasons, or are looking for report delivery before a national holiday, pricing of the report is typically inflated.
**Reminder that we appraise Commercial properties only. We should not be engaged prior to your financial institution if you intend to work with one for a banking loan; but you can always tell them you would prefer to have us complete you report and have the bank or financial institution engage us directly. **
What type of properties can you appraise?
We specialize and currently only service Commercial properties.
Estimating the value of different types of commercial properties takes different levels of expertise. No matter their level of expertise, appraisers always complete a valuation using one of three approaches: The cost approach, the sales comparison approach, or the income approach.
Our portfolio of all the various commercial property types that we appraise is found HERE.
If you don’t see your specific property type listed please send us a message here to inquire about your specific appraisal. Contact us HERE.
How do I know that you are a certified appraisal firm?
The Appraisal Foundation sets the minimum requirements for licensing, but check requirements in your state. Generally, the process to become state certified takes about three years. You can find the coursework completed by our appraisers HERE.
The minimum standards set by the Appraisal Foundation are:
- A Bachelor’s degree
- 300 hours of required coursework
- 3,000 hours of work experience supervised by a Certified General Appraiser
Estimating the value of different types of commercial properties takes different levels of expertise. No matter their level of expertise, appraisers always complete a valuation using one or more approaches: The cost approach, the sales comparison approach, or the income approach.
Does it matter where the property is located?
We currently are licensed to appraise properties located in Wisconsin and Illinois. For a map of the regions we service click HERE.
We currently cover the entire state of Wisconsin and can also perform appraisals in some Northern Illinois areas such as Winnebago, Boone, McHenry, Lake, Cook, Kane, DuPage, and Will Counties.
We are always willing to travel within the Wisconsin and Illinois regions but appraisals outside of these service areas might incur additional travel fees and longer report delivery times.
Can I submit a request for an appraisal online?
Yes, you can! Contact us by using this LINK.
**Reminder that we appraise Commercial properties only. We should not be engaged prior to your financial institution if you intend to work with one for a banking loan; but you can always tell them you would prefer to have us complete your report and have the bank or financial institution engage us directly. **
If you need delicacy in your appraisal or don’t wish for it to be known please mention this in your message to our team with best times to contact.
Please allow 72 hours for someone from our staff to respond to your message.
Should I engage Horizon for an appraisal so I can get a loan from a bank?
No. Federal banking regulations (known as FIRREA) strictly forbid the use of an appraisal ordered by a borrower (YOU) to be used by the lender. This is due to potential bias in the report. We suggest contacting your lender and having them engage us directly. Tell them you want Horizon Appraisal on the job!
What does a commercial appraisal cost and how long will I need to wait before I receive my appraisal?
There a lot of factors when it comes into pricing of an appraisal. These include:
- Location of the subject property in relation to our office or in relation to other appraisals we are already conducting in the area possibly
- How fast or soon the report is needed in relation to our current workload of other appraisals
- How many valuations and approaches are needed for the subject property
- Size and intricacy of the subject property
Typical appraisals can range anywhere from $1,500 on up and are usually delivered within 30 days.
If you are a private client Horizon does require a non-refundable deposit of half of your quoted appraisal cost up front prior to work proceeding.
Should you choose to have bound hard copies of your report mailed or delivered to you, there will be additional fees for printing, binding and mailing/ delivery of the reports. These will arrive after the agreed upon delivery date on the engagement letter subject to the carrier’s shipping and handling constraints.
I’ve received my quote or engagement letter from Horizon and am ready to move forward with a commercial appraisal. Now what?
When you receive your engagement letter from Horizon Commercial Appraisal, it will have specific instructions on it but generally the steps for most clients are:
- The first step is the most important that you sign and date the engagement letter as soon as possible and return it to our office. Our private clients should include their non- refundable deposit of approximately half of the appraisal cost; Financial institutional clients do not need to provide a deposit. After we receive your appraisal engagement letter and or deposit, we will get underway with research and getting you on the schedule.
No work is started prior to receiving your signed engagement letter and/or deposit for applicable clients. - After receiving your signed engagement letter and or applicable deposit, a member of our staff will then reach out to you to schedule your onsite property viewing and possibly inquire about additional information we need to complete our report.
- A certified appraiser will then travel to your subject property and inspect the exterior and interior of the property to take pictures, and ask questions about the property. It is legally required that an appraiser be shown around the property by the property owner or an authorized agent of the property or given permission to access the property.
- After the property viewing the appraiser will work on completing your report. As soon as it is ready it will be uploaded into any applicable portals for our financial clients or emailed / mailed/ delivered based on preference to our private clientele.
What other services can Horizon Commercial Appraisal offer?
In addition to our appraisal services, we can also provide consulting services such as market rent studies, feasibility analysis and financial statement review and Litigation services such as expert witness support for a variety of services and sectors. These are best discussed verbally or in person. Please use our contact us page HERE to get in touch with us so we can better serve you. Please allow 72 hours for response.
