Review Commercial Appraisal PDF Template

The Review Commercial Appraisal form is a vital tool used to assess the quality and accuracy of an appraisal report for commercial properties. It helps reviewers evaluate various aspects of the appraisal, including property identification, valuation methods, and compliance with standards. Understanding this form is essential for ensuring that appraisals meet necessary criteria and reflect true market conditions.

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Article Guide

The Review Commercial Appraisal form is a crucial tool in evaluating the accuracy and reliability of an appraisal report. This form serves multiple purposes, including identifying the property in question, detailing the appraiser's credentials, and specifying the type of appraisal conducted. It prompts the reviewer to assess various aspects of the appraisal, such as the purpose and function, property identification, location analysis, and valuation methods used. Sections within the form guide the reviewer through a comprehensive analysis, ensuring that all relevant information is considered. This includes examining the property's legal description, ownership history, and any zoning issues that may affect its value. The form also addresses the highest and best use of the property, along with a detailed valuation process that encompasses various approaches like cost, sales comparison, and income capitalization. By systematically evaluating these components, the Review Commercial Appraisal form helps ensure that the appraisal meets industry standards and provides an accurate representation of the property's worth.

Review Commercial Appraisal Preview

COMMERCIAL APPRAISAL REVIEW FORM

The appraisal report which is the subject of this review is briefly identified and described as follows:

Name of Project/Property __________________________________________________________________________________________

Location/Legal __________________________________________________________________________________________________

Type of propert ____________________________________________________________________ ❐ Existing ❐ Proposed Construction

Name of Appraiser _________________________________________________________________ Telephone ____________________

Address _______________________________________________________________________________________________________

Report Addressed to: _______________________________________________________________ Telephone ____________________

Address _______________________________________________________________________________________________________

Type of Appraisal Report: ❐ Narrative ❐ Printed Form ❐ Other (identify) ___________________________________________________

Value Sought: ❐ Market Value ❐ Other (identify) Date of value: ❐ Current ❐ Future ❐ Past

______________ Definitions Given For: ❐ Value Sought ❐ Interest To Be Valued

Interests Valued: ❐ Fee Simple ❐ Leased Interest ❐ Market Rent ❐ Other (identify)

❐ Easements ❐ Other (identify) __________________

______________ Assumptions and ❐ Standard ❐ Consistent with

Real Estate Valued ❐ Land ❐ Improvements Limiting Conditions: Valuation Process

❐ Ground Lease ❐ Personal Property ❐ Third Party ❐ Unreasonable or

❐ Other (identify)_______________ Report Excessive

Comments:

______________________________________________________________________________________________________________

Does the report adequately contain or identify: Yes No N/A Yes No N/A

Property Location/Address: ❐❐❐ Owners of Record ❐ ❐ ❐

Legal Description ❐❐❐ History of Ownership ❐ ❐ ❐

Real Estate Tax Information ❐❐❐ If Applicable to Subject Property:

Assessments, Bonds, etc. ❐❐❐ Amount of Purchase Price ❐ $____________

Existence of: Pending Sales Price ❐ $____________

Deed Restrictions ❐❐❐ Asking Price ❐ $____________

Covenants, Conditions, Restrictions ❐❐❐ Option Price ❐ $____________

Moratoriums ❐❐❐ Other ❐ $____________

Comments:

______________________________________________________________________________________________________________

Does the report adequately describe or identify: Does report:

Region ❐ Yes ❐ No ❐ N/A Sum up and rate the above area ❐ Yes ❐ No ❐ N/A

City ❐ Yes ❐ No ❐ N/A Identify and discuss important trends ❐ Yes ❐ No ❐ N/A

Neighborhood ❐ Yes ❐ No ❐ N/A Identify nuisances or hazards ❐ Yes ❐ No ❐ N/A

Comments:

______________________________________________________________________________________________________________

Comment upon the descriptions and analysis of the following: IMPROVEMENTS:

SITE: Adequate description of physical features ❐ Yes ❐ No

Adequate description of physical features❐ Yes ❐ No Attention given to:

Identification of encumbrances ❐ Yes ❐ No Quality ❐ Yes ❐ No

Does the report state adequacy of site for Functional Utility and Appeal ❐ Yes ❐ No

existing or proposed use ❐ Yes ❐ No Age ❐ Yes ❐ No

Utilities available ❐ Yes ❐ No Condition ❐ Yes ❐ No

Special Problems: Hazardous Conditions ❐ Yes ❐ No

Flood ❐ Yes ❐ No ZONING:

Environmental Hazards, Seismic, Toxic etc. Statement ❐ Yes ❐ No

Other (identify)_________________ ❐ Yes ❐ No Definition ❐ Yes ❐ No

Comments:

______________________________________________________________________________________________________________

Definition ❐ Yes ❐ No Does property conform to zoning and

Components ❐ Yes ❐ No neighborhood ❐ Yes ❐ No

Conclusion of Highest and Best Use______________________ Is use legal and physically possible ❐ Yes ❐ No

Current zoning ______________________________________ Has the report in this or other sections discussed:

Status zoning change _________________________________ Marketability (supply-demand, market trends,

Status of building permit (if possible construction) ____________ absorption occupancy levels) ❐ Yes ❐ No

Does report discuss feasibility/profitability ❐ Yes ❐ No Other (identify) ____________________________________

Were other studies/reports considered ❐ Yes ❐ No

Comments:

______________________________________________________________________________________________________________

may be reproduced without written consent, however, the “National Association of Review Appraisers and Mortgage Underwriter’s must be acknowledged and credited.

Section I — Purpose and Function of Appraisal

Section II — Property Identification, Ownership and Assessment

Section III — Location Analysis

Section IV — Property Description

Section V — Highest and Best Use

Comment and rate the approaches to value:

COST APPROACH: Satisfactory Unsatisfactory DISCOUNTED CASH FLOW ANALYSIS (DCF)

Format ❐❐ Satisfactory Unsatisfactory

Adequacy of data ❐❐ Format ❐❐

Source of costs ❐❐ Adequacy of data and support for:

Land value estimate ❐❐ Holding Period ❐❐

Estimated cost new ❐❐ Growth Rates ❐❐

Depreciation estimate ❐❐ Discount Rate ❐❐

SALES COMPARISON APPROACH: Development of Cash Flow Estimates ❐❐

Format ❐❐ Reversionary Value ❐❐

Adequacy of data ❐❐ Other Methods of Processing Income

Sources of data ❐❐ Stream (Mortgage Equity, Band of

Summary of sales table ❐❐ Investments, etc.) ❐❐

Use of adjustment grid table ❐❐RECONCILIATION:

Comparative analysis of sales ❐❐ Indicated values are:

INCOME CAPITALIZATION APPROACH: Cost Approach $ __________

Format ❐❐ Sales Comparison Approach $ __________

Selection of proper capitalization Income Approach $ __________

method ❐❐ DCF Analysis $ __________

Adequacy of data and support for: Other (Pending Sale, etc.)

Comparable Rentals ❐❐ Value Conclusion $ ________

Vacancy and Loss Factor ❐❐Allocation as Follows:

Operating History ❐❐ Land $ __________

Rent Roll ❐❐ Improvements $ __________

Income Estimate ❐❐ Personal Property $ __________

Expense Estimate ❐❐ Other $ __________

Net Operating Income ❐❐ Total Value $ ________

Capitalization Rate ❐❐

Comments:

______________________________________________________________________________________________________________

Does the report contain a certification ❐ Ye s ❐ No Does the principal appraiser make

Is the report co-signed ❐ Ye s ❐ No statement of concurrence with value

Did the principal appraiser sign the conclusion ❐ Ye s ❐ No

report ❐ Ye s ❐ No Does the report contain appraiser(s)

Did the principal appraiser personally qualifications ❐ Ye s ❐ No

inspect subject property ❐ Ye s ❐ No

Acceptable Unacceptable Acceptable Unacceptable

Report Format Property Valuation:

Readability and neatness ❐❐ Feasibility/Profitability ❐❐

Mathematical accuracy ❐❐ Market Trends ❐❐

Exhibits (Photos, Maps, etc.) ❐❐ Cost Approach ❐❐

Appraiser’s analytical ability ❐❐ Sales Comparison Approach ❐❐

Purpose and function of appraisal ❐❐ Income Approach ❐❐

Property identification ❐❐ DCF ❐❐

Locational analysis ❐❐ Reconciliation ❐❐

Property Description ❐❐ Date of Appraisal ❐❐

Site ❐❐ Overall Rating of Appraisal

Improvements ❐❐

Highest and Best Use ❐❐

Brief Comments on Unacceptable Ratings:

______________________________________________________________________________________________________________

Scope of Review: If reviewer does not concur with the soundness if conclusion, then

Read report ❐ Ye s ❐ No what is the recommended action:

Interviewed appraiser ❐ Ye s ❐ No ❐ Totally reject appraisal

Field Review ❐ Ye s ❐ No ❐ Have appraiser rework, revise, update the appraisal

Does the Reviewer concur with ❐ Have another appraisal prepared by someone else

the soundness of conclusion: ❐ Ye s ❐ No ❐ Other

Concluding Comments:

______________________________________________________________________________________________________________

Reviewer’s Signature _____________________________________________________________________________________________

Name of Reviewer __________________________________________________________________ Date ________________________

Position ___________________________________________________________________________ Department __________________

Address __________________________________________________________________________ Telephone ___________________

City, State, Zip __________________________________________________________________________________________________

may be reproduced without written consent, however, the “National Association of Review Appraisers and Mortgage Underwriter’s must be acknowledged and credited.

SECTION VI — Property Valuation

Section VII — Other Report Requirements

Section VIII — Final Rating of Appraisal

Section IX — Reviewer’s Conclusions — Recommendations

↓ Review Commercial Appraisal

File Properties

Fact Name	Description
Purpose of the Review	The Review Commercial Appraisal form is designed to evaluate the quality and accuracy of an appraisal report. It helps ensure that the appraisal meets professional standards and addresses all relevant factors.
Types of Appraisal Reports	This form allows for various types of appraisal reports, including narrative, printed form, or other specified formats. This flexibility accommodates different appraisal needs.
Property Identification Requirements	The form requires detailed information about the property, including location, ownership, and legal description. This ensures that all essential aspects of the property are considered in the appraisal review.
Governing Law	The form adheres to state-specific laws governing real estate appraisal reviews. For example, in California, it complies with the California Business and Professions Code, which regulates appraisal practices.

Instructions on Utilizing Review Commercial Appraisal

Completing the Review Commercial Appraisal form requires careful attention to detail. Each section is designed to gather specific information about the appraisal report being reviewed. Following the steps below will ensure that you fill out the form accurately and thoroughly.

Begin by identifying the project or property. Fill in the Name of Project/Property, Location/Legal, and Type of Property (choose between Existing or Proposed Construction).
Provide the Name of Appraiser, their Telephone number, and Address.
Indicate to whom the report is addressed by filling in the Name, Telephone, and Address of the recipient.
Select the Type of Appraisal Report by checking the appropriate box (Narrative, Printed Form, or Other).
In Section I, indicate the Value Sought (Market Value or Other), and specify the Date of Value (Current, Future, or Past).
Define the Interests Valued by checking the applicable options and providing any necessary details.
Comment on the Assumptions and Limiting Conditions related to the valuation process.
In Section II, answer the Yes/No/N/A questions regarding property identification, ownership, and assessment.
Move to Section III and assess whether the report adequately describes the Location by responding to the Yes/No/N/A questions.
In Section IV, evaluate the Property Description by commenting on the adequacy of the descriptions provided for improvements and site features.
Discuss the Highest and Best Use in Section V, ensuring to note whether the property conforms to zoning and neighborhood standards.
In Section VI, comment on the Property Valuation by rating the various approaches to value (Cost Approach, Income Capitalization, etc.).
Check if the report meets the Other Report Requirements in Section VII, including certification and appraiser qualifications.
Provide your overall rating of the appraisal in Section VIII, indicating whether it is Acceptable or Unacceptable, and offer brief comments if necessary.
Finally, in Section IX, summarize your conclusions and recommendations, including any actions you suggest if you do not concur with the appraisal's conclusions.
Sign the form, and provide your name, date, position, department, address, and telephone number.

Important Facts about Review Commercial Appraisal

What is the purpose of the Review Commercial Appraisal form?

The Review Commercial Appraisal form is designed to evaluate and assess the quality and accuracy of a commercial appraisal report. It serves as a checklist for reviewers to ensure that all necessary information is included and that the appraisal meets established standards. The form covers various aspects, including property identification, valuation methods, and compliance with local regulations.

What information is required to complete the form?

To complete the Review Commercial Appraisal form, specific details about the property being appraised are needed. This includes the name of the project, location, type of property, and the name of the appraiser. Additionally, the form requires information on the type of appraisal report, the value sought, and any assumptions or limiting conditions relevant to the appraisal.

How does the form assess the property identification section?

The property identification section evaluates whether the appraisal report adequately includes essential details such as the property location, owners of record, legal description, and history of ownership. Reviewers must check if this information is present and accurate, which is crucial for establishing the context of the appraisal.

What does the location analysis section entail?

This section assesses how well the appraisal report describes the property's location. Reviewers look for information about the region, city, and neighborhood, including any trends, nuisances, or hazards that may affect the property's value. A thorough location analysis helps in understanding the market dynamics surrounding the property.

What are the different valuation approaches mentioned in the form?

The form outlines several valuation approaches, including the Cost Approach, Sales Comparison Approach, and Income Capitalization Approach. Each approach is evaluated for its format, adequacy of data, and overall effectiveness in determining the property's value. Reviewers must assess whether the appraiser has used appropriate methods and supported their conclusions with sufficient data.

How does the form address the highest and best use of the property?

The highest and best use section examines whether the appraisal report has adequately defined the property's optimal use based on zoning regulations and market conditions. Reviewers check if the report discusses legal and physical possibilities, marketability, and any relevant zoning changes. This analysis is vital for understanding the potential value of the property.

What is the significance of the final rating section?

The final rating section allows reviewers to summarize their overall assessment of the appraisal report. They rate various aspects, such as report format, property valuation, and overall readability. This section provides a clear conclusion about the appraisal's acceptability and identifies areas that may require further attention or revision.

What actions can a reviewer recommend if they do not concur with the appraisal conclusion?

If a reviewer disagrees with the appraisal's conclusion, they can recommend several actions. These may include rejecting the appraisal entirely, asking the appraiser to revise the report, or suggesting that a new appraisal be conducted by a different appraiser. The reviewer can also provide additional comments to clarify their concerns and recommendations.

Common mistakes

Filling out the Review Commercial Appraisal form can be a daunting task, and many individuals make common mistakes that can lead to confusion or inaccuracies. One frequent error occurs in the property identification section. Failing to provide a complete and accurate legal description can hinder the appraisal process. It is essential to ensure that all information regarding the property's location and legal details is filled out thoroughly, as this lays the foundation for the entire review.

Another mistake often seen is the omission of critical appraisal details. Reviewers may overlook essential elements such as the type of appraisal report or the specific value sought. Choosing between options like market value or another type of value is crucial. If these choices are left unchecked or incorrectly marked, it can lead to misunderstandings about the appraisal's intent and purpose.

In the section regarding the highest and best use of the property, many reviewers fail to adequately address whether the property conforms to zoning regulations. This oversight can affect the overall assessment of the property's potential and marketability. Providing detailed comments on zoning compliance and possible changes is vital for a comprehensive review.

Additionally, inaccuracies in the valuation approaches can significantly impact the appraisal's credibility. Reviewers sometimes do not provide sufficient detail about the adequacy of data used in the cost approach or sales comparison approach. These sections require careful attention to ensure that all data sources are reliable and that the methods used for valuation are clearly articulated.

Another common pitfall is neglecting to comment on the property's condition and any special problems it may have. Issues such as hazardous conditions or zoning restrictions should be noted, as they can greatly influence the property's value. Failing to address these factors can lead to an incomplete appraisal that does not reflect the true state of the property.

Moreover, reviewers sometimes skip the final rating of the appraisal section altogether or provide vague assessments. This section is crucial for summarizing the appraisal's overall quality and should include specific comments on any unacceptable ratings. A detailed evaluation here can guide future actions and decisions regarding the appraisal.

Lastly, many individuals neglect to ensure that the report is signed and certified by the principal appraiser. This step is essential for validating the appraisal's authenticity. Without proper signatures and certifications, the appraisal may lack the necessary credibility required for financial transactions or legal proceedings.

Documents used along the form

The Review Commercial Appraisal form is often used in conjunction with several other documents that provide additional context and information regarding the appraisal process. Below is a list of common forms and documents that may accompany the Review Commercial Appraisal form, along with a brief description of each.

Appraisal Report: This document contains the detailed findings of the appraiser, including the methodology used to determine property value, comparable sales, and market analysis.
Property Inspection Report: This report outlines the physical condition of the property, noting any defects or issues that may affect its value.
Title Report: This document provides information about the ownership of the property, including any liens, easements, or encumbrances that may exist.
Market Analysis Report: This report analyzes the local real estate market, providing insights into trends, supply and demand, and pricing strategies.
Zoning Compliance Letter: This letter confirms that the property complies with local zoning regulations, which can impact its potential uses and value.
Environmental Assessment: This document evaluates any potential environmental hazards associated with the property, such as contamination or flood risks.
Financial Statements: These statements provide a snapshot of the financial performance of the property, including income, expenses, and cash flow projections.

These documents collectively enhance the understanding of the property's value and the factors influencing it. They serve to support the conclusions drawn in the Review Commercial Appraisal form and help stakeholders make informed decisions.

Similar forms

Appraisal Report: The Review Commercial Appraisal form is closely related to the standard appraisal report. Both documents include property identification, valuation methods, and conclusions regarding property value. However, the review form focuses on evaluating the appraisal's accuracy and completeness.
Market Analysis Report: Similar to the Review Commercial Appraisal form, a market analysis report assesses property value based on market conditions. Both documents analyze trends and comparable properties, but the market analysis report typically emphasizes broader market data rather than specific property details.
Property Inspection Report: This report shares similarities with the Review Commercial Appraisal form in terms of property description and condition assessment. While the inspection report provides a detailed evaluation of physical attributes, the review form critiques the appraisal's findings regarding those attributes.
Feasibility Study: Both documents assess the viability of a property investment. A feasibility study examines financial aspects and market demand, while the Review Commercial Appraisal form evaluates the appraisal's conclusions about property value and marketability.
Financial Analysis Report: This report focuses on the financial performance of a property, similar to the income capitalization approach in the Review Commercial Appraisal form. Both documents analyze income potential and expenses, but the financial analysis report is more comprehensive in its financial projections.
Due Diligence Report: The Review Commercial Appraisal form and a due diligence report both aim to provide a thorough understanding of a property before a transaction. They include assessments of legal, financial, and physical aspects, but the due diligence report often covers a broader scope, including legal issues and title searches.

Dos and Don'ts

Do ensure that all sections of the form are completed accurately. Missing information can lead to misunderstandings.
Don't rush through the process. Take your time to review each section carefully to avoid errors.
Do provide clear and concise comments where required. This helps clarify your thoughts and assessments.
Don't use vague language. Be specific in your comments and evaluations to enhance clarity.
Do double-check your contact information and the appraiser's details. Accurate information is crucial for communication.

Misconceptions

Misconceptions about the Review Commercial Appraisal form can lead to confusion and misinterpretation. Here are four common misunderstandings:

It is only for existing properties. Many believe that the Review Commercial Appraisal form applies solely to existing properties. In reality, it is also designed for proposed constructions, allowing appraisers to assess potential developments.
The form is too complex for general understanding. Some individuals think the form is filled with complicated legal terms that are difficult to grasp. However, it is structured to be user-friendly, making it accessible to both appraisers and clients alike.
All appraisal types are the same. There is a misconception that all appraisal reports follow the same format. The Review Commercial Appraisal form specifically accommodates various types of reports, including narrative and printed forms, to meet different needs.
It only focuses on property value. While value assessment is a key component, the form also emphasizes property identification, location analysis, and compliance with zoning regulations. This comprehensive approach ensures a thorough evaluation.

Key takeaways

Begin by accurately identifying the property in question. Clearly fill in the project name, location, and type of property, whether it is existing or proposed construction.
Specify the appraiser's details, including their name, telephone number, and address. This information is crucial for communication and verification.
Determine the purpose of the appraisal. Select the value sought, such as market value, and indicate the date of value—whether current, future, or past.
Ensure all relevant property details are included. This includes ownership history, legal descriptions, and any existing deed restrictions or covenants.
Conduct a thorough location analysis. Assess regional trends, neighborhood conditions, and any nuisances that may affect the property's value.
Evaluate the highest and best use of the property. Confirm that the use is legally permissible and physically possible, considering zoning regulations.
Provide clear comments and ratings throughout the form. This feedback will help appraisers understand areas needing improvement or clarification.