Every Commercial Appraisal Is Addressed to Someone
SCOPE SENTENCE A commercial appraisal is prepared for a named user and a stated purpose, as of one date. Knowing who the report is for is the first thing that decides what it has to contain. We settle that with you before anything is valued.
SUB Commercial property in San Bernardino: retail, industrial, office, owner-occupied and multi-tenant.
Who it is addressed to
The Person Who Pays Is Often Not the Person the Report Is For
BODY On a lot of commercial work the owner writes the cheque and the lender is the client. That is normal, and it is not a trick. It does mean the report is built to answer the lender’s question, on the lender’s terms, as of the date they specified.
It also means the report does not simply travel. Take an appraisal prepared for one lender to a second lender and the second one will usually want their own, because they were not the intended user of the first. The same is true when the purpose changes. A value prepared for financing was not prepared to settle a partnership buyout, and a value as of March does not become a value as of September because September is when you need it.
None of that is a technicality we are hiding behind. It is the shape of the work, and the earlier you know it, the fewer surprises there are. So the first conversation is not about price or turnaround. It is about who is going to read this, what decision it supports, and what date it has to speak to.
Whether any particular third party may rely on a finished report is a matter for the engagement letter and for your own advisers. What we will always do is tell you plainly, before we start, who the report is being written for.
The San Bernardino Commercial Appraisal Success Kit walks through the same four things in order.
Where this usually comes up
Where This Usually Comes Up
A lender has ordered the appraisal and you are the one paying for it
You will see the invoice and you may never see the engagement letter. It is reasonable to ask who the client is, what the intended use is, and whether you will be given a copy. Ask early. The answers are not secret and they change what you should expect to receive.
You have a report already and you are being asked for a different one
Perhaps the purpose has moved, or the date has, or the lender has. A previous appraisal is still useful to us as background. Whether it can be reused, or needs to be reissued, or has to be done again depends on what changed, and we will tell you which of those it is before you commit to anything.
You own the building your business works out of and you have never done this
Owner-occupied commercial property raises questions a tenanted building does not. Start by telling us what the value is for. Everything else, including what we will need from you, follows from that answer rather than the other way round.
What the opinion rests on
What the Opinion Rests On
BODY Every assignment is scoped in writing before fieldwork begins: the property, the interest being valued, the intended user, the intended use and the effective date. Those five things are the frame, and they are agreed rather than assumed.
From there the work is ordinary and it is documented. Market evidence relevant to the specific property and assignment, reconciled and explained, with the reasoning visible rather than asserted. Where the evidence is thin we say so in the report instead of smoothing it over.
We are independent of the transaction. We are not paid more for a higher number and we do not take assignments where the fee depends on the outcome.
Useful before you commission anything
A short guide to describing the assignment, identifying who the report is for, and gathering only what is already to hand.
What we do not do
There Is Nothing You Need to Withhold
BODY People ask us what they should avoid saying to an appraiser. It is one of the most common questions in this field and it deserves a straight answer: there is nothing.
The concern makes sense if you imagine an appraisal as an examination you can pass or fail. It is not one. We are not assessing you, and nothing you mention about the property will be used against you. Telling us the roof was replaced four years ago, or that a tenant is leaving in spring, or that the last offer came in below what you expected, gives us evidence. Withholding it does not protect a number; it just means the opinion rests on less.
What we cannot do is decide what your value should be. If you need a figure to reach a particular level, we are the wrong people to ask, and saying that out loud is part of being useful to you.
We also do not advise on who may rely on a report, on how a lender will treat it, or on the tax or legal consequences of a value. Those belong to your attorney, your accountant and the engagement letter. We will tell you where the boundary is rather than quietly stepping over it.
Scoping comes first
Six Steps, and the First Two Are the Ones People Skip
BODY 1. Tell us the property, the purpose, the effective date and the timing. Four things, in that order. This is the whole of the first conversation. 2. We identify the intended user and confirm the scope in writing, so you know before any work starts who the report is addressed to. 3. We ask for what is readily available: leases or a rent roll if the property is tenanted, income and expense information where it is relevant, records of improvements, plans, permits and any prior reports. 4. We inspect the property and complete the research the assignment needs. 5. We analyse the market evidence and reconcile it into an opinion of value. 6. We deliver the report in the format the assignment established.
You do not need every document before you contact us. Missing items get identified during intake, and a gap in the file is not a reason to delay the first call. Please do not create new paperwork for us either. Existing records are almost always the better starting point.
Questions we are actually asked
Questions We Are Actually Asked
Who pays for a commercial appraisal, and who is the report actually for?
Often two different parties. When a lender orders an appraisal, the borrower commonly pays for it and the lender is the client. The report is written to answer the client’s question, for the intended use named in it, as of the effective date. Ask at the start who the intended user is. It is a fair question and it should get a plain answer.
What type of appraiser can appraise a commercial property?
Commercial assignments call for a certified general appraiser. That is a broader credential than the one that covers houses, and the scope a given appraiser may take on is set by their certification and by the assignment itself. Ask directly, and ask whether they have handled the kind of property and the kind of purpose you have in front of you.
How do appraisers value commercial property?
By reasoning from evidence, not by retrieving a figure. Depending on the property and the assignment, the analysis may look at what comparable properties sold for, what the property earns or could earn, and what it would cost to replace. Which of those carries the weight is a judgement the report explains rather than assumes.
Why is the fee different for two buildings on the same street?
It depends on the property, the complexity of the assignment, the scope the intended use requires, and the timing. A small owner-occupied building and a multi-tenant investment property are not the same piece of work. Tell us what you have and what it is for, and we will tell you what the assignment involves before you commit to anything.
What should I not say to an appraiser?
Nothing. There is no answer that helps you here, because there is nothing to guard against. Anything you can tell us about the property, its condition, its income, its history or its problems is evidence, and evidence is what the opinion is built from. The one thing we cannot act on is a request to reach a particular number.
How do I find a commercial appraiser?
Look for a certified general appraiser with experience in the property type and the purpose you need, and ask three questions before you engage anyone: who will the report be addressed to, what is the intended use, and what is the effective date. An appraiser who answers those clearly is one who has scoped the assignment properly.
Does the appraisal say what my property should sell for?
It gives an independent opinion of value for a specific property, a stated purpose and one date. That is not the same as a listing recommendation or a prediction of what a particular buyer will pay. It is a considered view of value, supported by evidence, for the use it was prepared for.
More than one desk
The Report Lands on More Than One Desk
BODY A lender reads it against their own credit requirements and the terms of the loan they are considering. They are testing whether the collateral supports the facility.
An owner reads it to understand what the property is worth for the purpose at hand, and often to make a decision that has nothing to do with selling.
An attorney or accountant reads it as evidence in a matter they are handling, and needs the reasoning to hold up when someone else examines it.
A partner, co-owner or fiduciary reads it as a basis for a decision they will have to explain to somebody else.
These are different tests and none of them outranks the others. What they share is that the report has to be clear about what it was prepared for, so each reader can see whether it answers their question.
Commercial property in this city
Commercial Property in San Bernardino
BODY We appraise commercial property throughout the city and the surrounding county. The commercial base here is not the one the phrase "commercial real estate" usually brings to mind.
Retail is the largest category of establishment in the city, at 16.1 per cent against 10.5 per cent across California. Professional, scientific and technical services, the classic office tenant, run at 7.1 per cent against 13.9 per cent statewide. Both figures are shares of establishments from the Census Bureau’s County Business Patterns for 2022, and the city figure is the sum of the seven San Bernardino postal ZIPs, because that series is not published for city boundaries.
What that means in practice is that a lot of commercial property here is a storefront, a clinic, a restaurant or a small industrial unit, often occupied by the business that owns it. Those buildings raise different questions from a multi-tenant office asset, and the assignment is scoped to the property in front of us rather than to a template.
Background before you commission
Groundwork
A Guide to Scoping the Assignment
Our preparation guide for commercial owners in this city: what to gather, what you do not need yet, and the four things to bring to the first conversation. San Bernardino Commercial Appraisal Success Kit
The Resource Hub
Guides on appraisal purpose, scope and reporting across our service areas. The Resource Hub
What’s It Worth
Articles on valuation questions as they come up in practice. What’s It Worth
When the matter is not commercial
If the Matter Behind the Value Is Something Else
Commercial property turns up inside matters that are not commercial transactions. If one of these is closer to your situation, start there.
If the property is in probate and the court is involved, the San Bernardino probate page deals with what changes when the court’s reach and the property’s market are not the same thing.
If you are a trustee and will answer for the value you use, the San Bernardino trust page deals with who carries that.
If the value is needed as of a date in the past, the San Bernardino inheritance page deals with rebuilding it from evidence that has aged.
If a dissolution needs one property valued at one date, the San Bernardino divorce page sets out what that figure does and does not decide.
If the property is a house rather than an income-producing asset, the San Bernardino residential page covers which nearby sales belong in that comparison.
Start With Who It Is For
BODY Tell us the property, the purpose, the effective date and the timing. We will tell you what the assignment involves, who the report will be addressed to, and what we need from you. You do not need a complete file to make the first call.
