Commercial appraisal and consulting services are provided for both existing and proposed commercial use construction projects.
Every assignment is quoted based upon the anticipated number of hours required in order to complete it in accordance with the Uniform Standards of Professional Appraisal Practices (USPAP).
I also take into account the clients stated level of required reporting (restricted, summary or self-contained); who the intended users of the report will be and the complexity of the assignment.
The lowest fee I have for a commercial appraisal reported in a summary report format is $1,500. Most typical commercial office appraisals fall within a range of $2,500 to $5,000. These are usually presented in a hybrid form / narrative report. Few appraisal assignments require more than this format. Even more complex, higher fee assignments are usually better suited to this format, than self contained reports.
Self contained reports start at $4,500. They may or may not incorporate forms suited to the purpose, augmented by as much narrative and addenda pages as is necessary for self containment.
Pros and Cons associated with report types...
Form reports such as the UCIAR-EP or UCIAR-SP provide for a greater level of reporting uniformity than do other report types. When a form report is used, it becomes very clear with only a glance, when something is missing. Conversely, so called “narrative” reports (originally applicable primarily for self contained reports) provide appraisers with a great amount of leeway in what is and is not provided, with little in them to let a lay-person know that entire approaches have been ignored. These reports are the most prone to abuse, or serious omission of all the report types used.
Even 100 to 200 page so called self-contained reports may often be 80% to 90% filler or irrelevant ‘stuffing’, geared toward assembly line appraising.
My own preference is for the use of a form-narrative hybrid. The user still s the advantages of a forms ease of reading, while enabling the appraiser to summarize the forms stated findings and conclusions in seven (7) to fifteen (15) primary pages and 20 to 50 +- more addendum and exhibit pages.
For clients with more critical cost containment requirements, a variety of lower cost report forms can be utilized. Regardless of the report type used or detail required by the client, I (and all appraisers) am required by law to perform a certain minimum standard of research and analysis. This takes time, and forms the basis of most fee quotes.
Example: A non-conventional institutional lender (so called ‘hard money’) may have a need for a most probable number (value) in order to decide to make a secondary portfolio loan, or perhaps even a foreclosure decision on a single-tenant owner-user office building in a modest value range. Neither they nor their client are prepared to spend $2,500 or more. It is possible that their needs can be met (and USPAP complied with) using an evaluation format supplemented by narrative addenda at a cost closer to only $1,500.
At the other end of the spectrum is an investor - developer who is seeking financing for a proposed regional acute care hospital, with an as proposed value estimated in the hundreds of millions of dollars, to be built utilizing an FHA assisted financing. The requirements for special studies, and the complexities of conforming to complex government regulations would dictate a combined appraisal-other expert studies fee in the hundred and fifty thousand dollar to two hundred fifty thousand dollar range. The final report could entail volumes rather than dozens or hundreds of pages, and it could still be called a summary report!
The standard for IRS appraisals is the summary report format.
