Ready To Buy Your First Commercial Property For Your Business? Multiple Inspections And Appraisals Are A Must
Investing in a commercial property for your business is a great financial decision, but you don't want to overpay for the property. This property can become a large asset in your portfolio down the road, and real estate is one of the best investments you can make. There are important steps to take to make sure you don't pay more than the property is worth.
You want to get the best property inspection and multiple property appraisals. Here are some reasons why these steps are so important.
Appraisals Can Vary
There can be big discrepancies with appraisals, and you don't want to overpay because the property was incorrectly appraised. Different things that will be taken into consideration in the appraisal include:
- Square footage of the property
- Condition of the exterior and interior of the building
- Location of the property
- Updates or maintenance on structural features like roofing, electrical and more
- Sales of similar buildings in the same area within the past few months
When you have multiple appraisals, you can use the lowest one as leverage for the price negotiations. When you must submit an appraisal to your lender, the highest appraisal will be what you want because you need the building to appraise for the value of your loan. Schedule at least two and then compare.
Inspections are Crucial
A building inspection will most likely be required by your lender and is something that you never want to purchase a commercial property without. The inspection will look at everything that has to do with the condition of the structure and components of the property like:
- Flooring conditions
- Radon exposure
When you get the inspection back it will show you what areas of the building are problematic, what needs to be repaired, and what may be unsafe. You will use the inspection to negotiate costs, repairs, and details with the seller.
The bank will look at the inspection and the appraisal before determining how much you can borrow to purchase the property. The bank may also want to see some of the issues that came up in the inspection repaired and eliminated before you close on the loan.
If you know that purchasing a commercial property is the best investment at this current time, and you have the funds to move forward, be sure to get a thorough appraisal and inspection. This way you know what you're buying and you can get a fair price.
For more information, contact a commercial real estate appraisal service near you.