Land Valuation commercial property

[Van Gogh]

This is a dumb question, that I need verified. I was asked if a licensed appraiser can appraise a commercial vacant lot that is maybe value over $300,000. I said that licensed appraisers could not appraiser commercial businesses over $250,000 but a land valuation should be fine. I have never thought about this and I have done enough land appraisals but never any commercial. Anyone want to agree or disagree with me. I have not done any research on this topic, but figure I am right.

 

[CANative]

In most states the scope of practice for a licensed/certified (residential) appraiser is confined to 1-4 unit residential property. This includes unimproved land with commercial HBU.

 

[CoorsLight]

This is a dumb question, that I need verified. I was asked if a licensed appraiser can appraise a commercial vacant lot that is maybe value over $300,000. I said that licensed appraisers could not appraiser commercial businesses over $250,000 but a land valuation should be fine. I have never thought about this and I have done enough land appraisals but never any commercial. Anyone want to agree or disagree with me. I have not done any research on this topic, but figure I am right.

I completed a vacant commercial lot at the end of last year. Before doing so, I contacted the state board. I felt comfortable with the property as approximately half of my appraisals are vacant land, and it was in my market area. The state board responsed that a licensed appraiser could complete the vacant lot as long as the value was under $250,000. I think it was somewhere along the lines of a $50,000 refinance with about a $75,000 value. Also, I believe it was stated clearly by the board that the lot was considered non-complex.

 

[George Hatch]

Licensing limitations are mostly a matter of state regulation.


The Appraisal Qualifications Board's "Real Property Appraiser Qualification Criteria" includes the following limitations on the scope of practice for State Licensed Real Property Appraisers:

General
A . The Licensed Residential Real Property Appraiser Classification applies to the appraisal of non-complex one to four residential units having a transaction value less than $1,000,000 and complex one to four residential units having a transaction value less than $250,000 .

B . Complex one- to four-family residential property appraisal means one in which the property to be appraised, the form of ownership, or the market conditions are atypical

C . For non-federally related transaction appraisals, transaction value shall mean market value .


1 . The classification includes the appraisal of vacant or unimproved land that is utilized for one to four family purposes or for which the highest and best use is for one to four family purposes .

2 . The classification does not include the appraisal of subdivisions for which a development analysis/ appraisal is necessary .

II . All Licensed Residential Real Property Appraisers must comply with the COMPETENCy RULE of USPAP .

So, if the highest/best use for this site is as 1-4 residential then that would be something that would fit the AQBs comment above. Anything that could be classified as complex residential or non residential by nature would not fit their criteria.

Regardless of licensure, there remains the requirement for adherence to the Competency Rule. The measure of that competency would be based on what would normally be expected from appraisers who are competent to appraise such properties. That means that the benchmark for this assignment would probably be established by the General Certified appraisers who do this sort of assignment on a regular basis.

Nobody is going to cut you any slack on their expectations for this assignment just because you've never done one like it before.


Just so you know, the average commercial appraiser would be summarizing a highest and best use analysis on this property, and they would be using their resources to identify their comps; those resources possibly including data you might not have access to. They may very well use one or more units of comparison that you might not be accustomed to using and they will probably be considering economic trend and commercial market trend analyses you might not be familiar with performing.

 

[Michigan CG]

Appraising residential land and appraising commercial land is two different things. For commercial properties zoning is a big part of the appraisal. What is permitted, what is not permitted. How big of a building can you build and still have ample parking? What are the parking space regulations per 1,000 SF of GBA?

What type of properties are allowed for the zoning? There is also in depth Highest and Best Use analysis which should include a lengthy zoning discussion, traffic counts etc.

An appraisal of vacant land would take into account the comparable sales and their zoning, their traffic counts and many other factors.

Commercial land appraisals are typically narrative reports and the fee for the competency, knowledge and experience should be reflected. Anyone doing a commercial land appraisal for $300 most likely does not everything that is needed for such an appraisal.

 

[The Warrior Monk]

In addition to what others have noted, the client may require a certain credential, regardless of license law.

 

[timd354]

This is a dumb question, that I need verified. I was asked if a licensed appraiser can appraise a commercial vacant lot that is maybe value over $300,000. I said that licensed appraisers could not appraiser commercial businesses over $250,000 but a land valuation should be fine. I have never thought about this and I have done enough land appraisals but never any commercial. Anyone want to agree or disagree with me. I have not done any research on this topic, but figure I am right.

Before you possibly risk your license and livelihood based on some answer that someone on some online forum provides to you, you would be wise to go to the commission's website and actually take a look at the applicable laws and regulations for appraisers in Maryland:

http://www.dllr.state.md.us/license/law/reahilaw.shtml


I will give you a hint to help you out...you will find the answer to your question in the regulations (COMAR) as opposed to the the statue (the Annotated Code of Maryland)...there are links to both on the commission's web page.

Since you have never done any commercial land appraisals, you would be very well advised to either turn down this assignment or partner with someone who has experience performing appraisals of commercial parcels.

 

[Lee Lansford]

Before you possibly risk your license and livelihood based on some answer that someone on some online forum provides to you, you would be wise to go to the commission's website and actually take a look at the applicable laws and regulations for appraisers in Maryland:

http://www.dllr.state.md.us/license/law/reahilaw.shtml


I will give you a hint to help you out...you will find the answer to your question in the regulations (COMAR) as opposed to the the statue (the Annotated Code of Maryland)...there are links to both on the commission's web page.

Since you have never done any commercial land appraisals, you would be very well advised to either turn down this assignment or partner with someone who has experience performing appraisals of commercial parcels.

Good advice to the OP.

 

[CoorsLight]

Added, FWIW, to the OP, I had my father who is a CG give me a helping hand with the assignment I mentioned above. I would not have taken the appraisal otherwise.

 

[Van Gogh]

Well, thanks for all your insight on this matter. As I said before it was a question and I provided the wrong answer. I will have to suck it up and say I am wrong. I gotta say that was some well informed info you all provided. Thanks a lot.