I lately did a commercial actual estate appraisal in Orlando on a piece of property owned by a nice lady who sadly had just lost her husband. Her adult son flew in from out of town to assist her settle the estate. The son necessary a commercial actual estate appraiser, and he hired me for the job.
He was confident that the property was worth about $750,000, according to a particular common free of charge on-line web page service that you have most likely heard of (hint: it rhymes with willow and begins using a Z!) This cost-free service is infamous for getting a so-called trustworthy source for estimating what I call “quick and dirty” genuine estate values. When I met with him, he had the documentation for his web-derived predetermined value in hand, and he was overly confident that I could be onboard. I went back to my office and instantly ran out the legal description for the property on my Deed Plotter software program.
It turned out that the property had considerably much less land region than this no cost estimating service stated the property had. Right after even further investigation, it turned out that the cost-free on the web estimating service utilized exactly the same unit value and land location located inside the county property appraiser’s records. I did my sales search and discovered 3 comparable sales inside two miles of the topic property, which had closed inside the past couple of months. These sales reflected a somewhat tight range, and to the disappointment of the owner and her son, the value was about 35% below the $750,000 value they hoped it could be.
Reality Check Number 1 – The assessed value estimated by the county property appraiser is often a truly poor indicator of marketplace value
Reality Check Number two – the estimated value estimated by free of charge on the internet valuation services may also be a actually poor indicator of marketplace value
I’ve never ever utilized this free of charge on the web value estimating service, since very frankly, I cannot envision that considerably analysis goes into these value estimates. On the other hand, I do check the assessments estimated by the county property appraiser on each and every 1 of my commercial appraisals, and extremely rarely do I discover that their assessments are in-line using the marketplace values. The valuation for a certain property is constantly individualized, and is typically derived from sales or rental information in an ever-changing marketplace.
For this reason alone, estimating marketplace value must be left to the commercial appraisers who think about all the detailed analysis needed in each and every appraisal assignment.