Definition
Bank Appraisal – An appraisal version which is reduced in scope and complies with local banking requirements, and which is economically competitive. Bank appraisals are different in that they have a limited number of valuations methods and are not as comprehensive in analysis. This type of assignment may also be done in a faster manner than other, more comprehensive appraisals. designated appraiser.
Types
– Retail
– Industrial
– Office
– Land
– Special Use
Approaches, Relevance
– Cost
– Sales comp or market approach
– Income capitalization
– Sales comp or market approach
Scope
– Reduced scope
– External may be used to complete inspection
Value Impacting Factors
– Contract – if there is a rental contract associated with the property it may impact the asset value
– Location, construction quality, design
Important Inputs
– Tenant credit quality
– Rent, rental growth
– Rent as % of sales
Recent Trends
– Refinancing of existing occupied properties
– Operating financing for companies
– Debt financing for large to medium sized businesses
Deliverable
Narrative Appraisal Report
1. Value impacting considerations – summary
2. Purpose, scope, limitations of the report
3. Land description
4. Improvement description
5. Scope of work
6. Highest and best use
7. Approaches to value
8. Reconciliation
9. Certification statement
