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Commercial Real Estate Appraisal

Article by Carl Graeber

Probably most of you are informed about the nature of commercial real estate appraisal, but the fact that some of us are ignorant of what the commercial real estate appraisal is all about, the need for thorough explanation about this matter must be given attention.

So for that reason, I would like to discuss some important considerations about the nature of commercial real estate appraisal. Just remember that this information is just some of the fundamentals for a successful commercial real estate appraisal.

According to many resources, the commercial real estate appraisal is just like some forms of home appraisals that most of the people need when buying or selling a home. For that alone, the commercial real estate appraisal is therefore an estimate of the value of the commercial real estate property. It is important to note that the commercial real estate appraisal is not just done by any person, but the commercial real estate appraisal is performed by a qualified and certified professional called an appraiser. Along with that fact, the commercial real estate appraisal is generally recognized with one of three approaches, which include a cost approach, a comparison approach, and an income approach.

With a cost approach of commercial real estate appraisal, the appraiser investigates what would be the cost for a replacement or improvement of the commercial real estate as of the date of the commercial real estate appraisal. In the sense of the second approach of commercial real estate appraisal which is the comparison approach, the appraiser in this sense of commercial real estate appraisal approach really make some comparisons with the value among other commercial real estate properties of the same size, quality, and location that has been currently sold. On the other, the use of the commercial real estate appraisal’s third approach, which is the income approach of commercial real estate appraisal, the appraiser then identifies the value of the commercial real estate property based on the estimate of what an investor would pay with respect to the net income that the commercial real estate property contributes. Nevertheless, the income approach of the commercial real estate appraisal is said to be only available for income producing commercial real estate properties.

Finally, the commercial real estate appraisal will be only made successful if the commercial real estate appraisal includes the estimate value, the effective date of the appraisal, the purpose of the appraisal, the identification of the commercial real estate property and its ownership. Aside from that, the commercial real estate appraisal must also include the condition of the neighborhood, factual data, qualifying conditions, analysis and interpretation of the data and the assumptions made the processing of the data by a single or more of the three approaches to commercial real estate appraisal to value and the certification and the signature. Such considerations must be given attention when doing a commercial real estate appraisal for the benefit of the parties involved in the commercial real estate appraisal.

About the Author

Before going into the buying process you should first ask yourself if your are already ready for home buying. Find out more on the free website at: www.the-commercial-real-estate-business-website.com

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Property Tax Myth

Time spent protesting your property taxes can be very profitable to you. In fact, the average property tax savings for homeowners is 0. However, the uncertainty of how the process works and what results are achievable intimidates many into not attempting to protest their property taxes.

The following steps will provide you insight into the appeal process and put you on your way to a successful appeal:

Either send a written notice of appeal to the ARB for the county in which your home is located or utilize the comptroller’s form. The deadline to file an appeal is May 31st.

Request a House Bill 201 packet. The packet is available at a nominal cost and will include information regarding both market value and unequal appraisal and the appraisal district’s information regarding size, condition and other qualitative and quantitative data for your property. Requesting this packet limits what information the appraisal district can present at the hearing.

Review the appraisal district’s description of your home and confirm that all the information is accurate. If the appraisal district overstates either the quality or quantity of improvements to your property, this is an excellent means to reduce your property taxes for the current years and subsequent years.

By protesting on unequal appraisal, you are claiming the appraisal district assessed your home for more than your neighbor’s home. To present this protest, research around 10 comparable properties that are similar in regard to the quality and quantity of improvements within your neighborhood.

Prepare your own unequal appraisal analysis based on researching assessment comparables on the appraisal district’s website or by written request. Select assessment comparables and summarize the data in a table.

If you feel your property’s assessed value is too high, it’s your right to file a formal protest. You can protest your property value yourself following the guidelines above, or hire a professional consultant to handle your protest for you. Either way, there’s no reason to pay more property taxes than is required by law.

Don’t pay more than your fair share of property taxes. Let O’Connor & Associates reduce your California property tax. Oconnor & Associates can represent you at the Florida property tax .

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Harris County Appraisal District – Tips for a Successful Property Tax Protest

Harris County Appraisal District – Tips for a Successful Property Tax Protest

Harris County Appraisal District assesses property and that value sets your property tax amount. Reducing your property taxes is relatively simple but requires a modest commitment of time. Your other option is to hire a property tax consultant. Basic steps to reducing the property tax assessment set by Harris County Appraisal District include appealing both market value and unequal appraisal annually, obtaining the Harris County Appraisal District evidence, preparing for the hearing(s) and attending the informal and/or appraisal review board hearing. Few property owners are aware of the option to obtain the HCAD evidence. Sometimes referred to as the House Bill 201 package or 41.461 package, this information in invaluable in preparing for your property tax hearing. This article focuses on the hearing process.

There are two options for the “administrative” hearing process at Harris County Appraisal District: 1) the informal hearing and 2) the appraisal review board (ARB) hearing. Neither the property owner nor Harris County Appraisal District is required to attend the informal hearing. About 80% of property tax protests are resolved by agreement between the property owner/property tax consultant and the Harris County Appraisal District appraiser. The second option, which typically occurs if you are not able to reach agreement with the Harris County Appraisal District appraiser, is the ARB hearing. The property owners often receive some property tax relief at the ARB hearing.

Harris County Appraisal District appraisers seldom reduce the assessed value for a home by 0,000 or more. If you are seeking a reduction of more than 0,000 for a home, you should probably skip the informal hearing with the Harris County Appraisal District appraiser. There are several reasons for skipping the informal hearing at HCAD if you are seeking an increase of 0,000 or more. It will likely be a waste of your time. Further, you spend your time helping the HCAD appraiser to prepare their file for the ARB hearing.

Make sure you arrive early for the hearing and try to project a cheerful, cordial and relaxed attitude, even if you are nervous. After you check in with the Harris County Appraisal District clerk, you will likely wait for 30 – 60 minutes. Bring a book, newspaper or work to pass the time. Greet the Harris County Appraisal District appraiser cheerfully and enthusiastically. His goal is similar to yours; reach a compromise quickly. At Harris County Appraisal District, the appraisers are encouraged to make changes if there is evidence to support the change. The exception is unequal appraisal. Most Harris County Appraisal District appraisers are reluctant to make changes on unequal appraisal evidence. HCAD’s approach on unequal appraisal is in flux. However, if your appeal is on unequal appraisal, you will likely need to attend the ARB hearing.

After you exchange and discuss evidence with the Harris County Appraisal District appraiser, he will likely make you an offer to settle the property tax protest. You can accept the offer or continue the appeal with the ARB hearing. In most cases the value offered informally will also be suggested by the Harris County Appraisal District appraiser at the ARB hearing.

Property owners are often reluctant to attend the appraisal review board (ARB) hearing because they think they are wasting their time with such a small property. This is not the case. Harris County ARB members are courteous, respectful and want the property owner to feel good about the ARB hearing.

Players at the ARB hearings include the 3 ARB members, property owner (or property tax consultant) and the Harris County Appraisal District appraiser. After introductions and a brief explanation of the process:

Property owner presents evidence

Questions from ARB members

Harris County Appraisal District appraiser presents their evidence

Questions from the ARB

Property owner rebuttal

Questions from the ARB

ARB panel deliberates and announces a decision

In most cases, property owners believe the decision was reasonable. The decision is not subject to negotiation. Thank the ARB members for their time and service. If you are not satisfied with the decision, you can pursue binding arbitration or a judicial appeal.
The appraisal division of O’Connor & Associates is a national provider of investment real estate appraisal services including. Business valuation ,market studies , feasibility studies, real estate consulting, income tax, HCAD, Property tax, Cost segregation, Commercial real estate appraisal, Due diligence

Patrick O’Connor

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