Commercial Appraisal Services

Our focus at RogerMillerAppraisal.Com, Inc. is your appraisal needs, be they for financial lending activities, estate planning, gifting, insurance purposes, condemnation, tax appeal, acquisition, disposition, settlement matters, etc. 

Our real estate appraisal background ranges from single family residential to multi-tenant commercial facilities. We are capable of under taking commercial appraisal assignments in Indiana and throughout the United States. 
  

                       VALUATION PROCESS DEFINED

The valuation process is the orderly program in which the data used to estimate the value of the subject property are acquired, classified, analyzed, and presented. The first step in the process is to define the appraisal problem - i.e., identify the real estate, the effective date of the value estimate, the property rights being appraised, and the type of value sought. 

Once this has been accomplished, the appraiser collects and analyzes the factors that affect the market value of the subject property. These factors are addressed in the regional and local market analysis, the site and improvement analysis, and the highest and best use analysis, and in the application of the three approaches to value.

Appraisers generally use three typical approaches to value: the Cost Approach, the Sales Comparison Approach (or the Market Data Approach), and the Income Capitalization Approach. 

The Cost Approach is a tool in the appraisal process that indicates the anticipated cost of creating property. It is defined as, “A set of procedures through which a value indication is derived for the fee simple interest in a property by estimating the current cost to construct a reproduction of (or replacement for) the existing structure, including an entrepreneurial incentive, deducting depreciation from the total cost, and adding the estimated land value. 

Adjustments may then be made to the indicated fee simple value of the subject property to reflect the value of the property interest being appraised. The use of this approach is predicated on the assumption that a prudent investor is not warranted in paying more for a given property than its cost of production. When valuing recently completed sites and/or improvements, the Cost Approach is normally a valid indication of aggregate project value. 

The Sales Comparison Approach is a process where an indication of value is sought by analyzing recent transactions involving similar properties. It is defined as, "A set of procedures in which a value indication is derived by comparing the property being appraised to similar properties that have been sold recently, then applying appropriate units of comparison and making adjustments to the sale prices of the comparables based on the elements of comparison. 

The sales comparison approach may be used to value improved properties, vacant land, or land being considered as though vacant; it is the most common and preferred method of land valuation when an adequate supply of comparable sales are available. The use of this approach is predicated upon the assumption that a prudent investor will pay no more for a given commodity, (in this case an interest in real estate), than he or she can obtain elsewhere in the market. The Sales Comparison Approach produces a good indication of value when sales of similar properties are available.

The Income Capitalization Approach is predicated on the assumption that a definite relationship exists between the amount of income a property can earn and its value. In this approach, the anticipated annual net income of the subject property is processed to produce an indication of value. It is defined as, “A set of procedures through which an appraiser derives a value indication for an income-producing property by converting its anticipated benefits (cash flows and reversion) into property value. 

This conversion can be accomplished in two ways. One year’s income expectancy can be capitalized at a market-derived capitalization rate or at a capitalization rate that reflects a specified income pattern, return on investment, and change in the value of the investment. Alternatively, the annual cash flows for the holding period and the reversion can be discounted at a specified yield rate.

The final step in the valuation process is the reconciliation or correlation of the value indications. In the reconciliation, the appraiser considers the relative applicability of each of the approaches used, examines the range of value indications, and gives most weight to the approach that appears to produce the most reliable solution to the appraisal problem.

  Types of Appraisal Reports & Pricing    

There are three (3) basic types of appraisals that can be performed;  Restricted Use, Summary, or Self-Contained report.

A Restricted Use Appraisal report is typically requested by individuals that are somewhat familiar with the real estate at hand. A full interior and exterior physical inspection will be performed on the real estate. The Restricted Use Appraisal is a limited report that typically only states the appraiser’s value conclusion with very limited explanation. Many clients request a Restricted Use Appraisal when time is of the essence.   

This type of appraisal report is considered the least costly of the three (3) report types. The appraiser must disclose in the report the actions taken or not taken in deriving the data used to support the value conclusion of the real estate at hand. The Restricted Use Appraisal is definitely less expensive than a Summary or Self-Contained appraisal, however it is considered less reliable.

A Summary Appraisal report typically includes the appraiser performing a full interior and exterior physical inspection of the real estate and developing all applicable approaches to value if deemed applicable to the real estate and appraisal problem. 

This particular appraisal will include all market research, assemblage of pertinent data (listing and classifying), listing of appropriate analytical techniques and reporting of knowledge, experience and judgment. This type of appraisal is slightly more costly but the final results are more comprehensive, illustrative and reliable. The Summary Appraisal report is the most frequently requested.

A Self-Contained Appraisal report typically includes the appraiser performing a full interior and exterior physical inspection of the real estate, and developing all applicable approaches that pertain to the asset and appraisal problem. The Self-Contained Appraisal report provides all the appraisers data and rationale that was utilized in the development of the appraisal analysis. 

All conclusions and data sources are fully disclosed and discussed. The Self-Contained Appraisal is definitely more expensive than the above appraisal types, however it is considered most reliable. 
 

We have accepted appraisal assignments from clients in Indiana, Ohio, Michigan, Illinois, Kentucky, Wisconsin, Colorado, California, Florida, Utah, New York and Massachusetts.