Frazier Capital Valuation’s trained staff undergoes exhaustive research of the relevant market data in order to provide an adequate and thorough analysis of the property at hand. Our typical appraisal goes through the following steps of preliminary research prior to conducting our final analysis:
- General data concerning the region, city, and neighborhood is collected and organized. This typically includes information about population, employment, income levels, market conditions, as well as financing availability and construction costs.
- Data concerning the subject property is collected. This includes descriptive legal information, as well as physical data concerning the land as well as the existing building. In addition, we collect information about flood hazards, earthquake fault line proximities, zoning, traffic, and more.
- Data is collected on comparable properties within the same market. Legal and physical data is pulled and then adjusted accordingly to create a more fair comparison.
The data collected is essentially used to conduct an analysis and conclude a value using three typical approaches: the cost approach, the market approach, and the income approach.
- The Cost Approach – This approach is build upon the notion that a building is worth what it would cost to create anew. Appropriate adjustments are made to account for differences in age, condition and other factors that may affect the tastes of the market. However, this approach requires the appraiser to estimate the value of the land as if it were vacant and available for use, in addition to estimating the total building costs and accumulated depreciation.
- The Market Approach – The market approach compares the subject property to comparable buildings in the same area that have recently sold on the open market. As the appraiser adjusts for differences in the terms of the sale as well as differences in the characteristics of each property, they reconcile the differences in order to come up with a fair market value for the subject property.
- The Income Approach – Many commercial buildings are capable of producing income. This approach is used to conclude a fair market value based upon the levels of net income the property is capable of producing. The income approach is often used to test the results of the market and cost approaches.
Value is based upon the utility of the property; how useful is it to others? Value is also based upon scarcity; how many comparable buildings are available on the market? Value is certainly based upon the demand; what desires exist to possess the subject property or similar properties? And lastly, value is based also upon transferability; is the property able to change ownership or use? These four things work together to create market value: what the subject property is worth in a market where comparables might be scarce or not; and where people may or may not want to purchase the subject building.
Frazier Capital Valuation has a strong reputation as being one of the more thorough and professional appraisal firms in the market. Our reports provide readers with a multi-disciplined approach, meticulous research, and a clear and easy to understand analysis of how we concluded upon the value that we did. Please click here and contact us if you are interested in having your commercial property appraised.
Frazier Capital Valuation is adept at appraising the following types of properties: