Commercial Real Estate
The Commercial Real Estate Appraisal Process
A commercial appraisal establishes market value, which drives LTV and loan sizing. It applies the income, sales-comparison and cost approaches depending on property type, plus a condition and market analysis. The lender orders it; a prepared borrower speeds it up.
- The lender engages a licensed appraiser
- The appraiser inspects the property and site
- Leases, rent roll and operating statements are analyzed
- Value is reconciled across the applicable approaches
- The report drives the final loan amount
How to avoid delays
- Have leases and rent roll ready
- Provide clean operating statements
- Arrange prompt access
- Flag material facts — deferred maintenance, tenants in transition — early
Surprises at the appraisal stage are expensive, so surface anything relevant before the report is written.
Frequently asked questions
Who pays for the appraisal?
Typically the borrower, ordered by the lender.
What if value comes in low?
Options include a larger down payment, a different lender, or challenging the report.