Projected Value and Market Expectations Meet in Commercial Comparable Sales!
- Author C. Michael Hunter
- Published March 22, 2011
- Word count 612
A business should develop an informed opinion regarding the market value of a particular piece of real estate. This process is commonly known as property valuation and is frequently done by a licensed appraiser. Property valuations are sometimes taken for granted by businesses, particularly with smaller companies that have little experience in leasing and real estate. Having an overview of some of these common appraisal terms can be very helpful as well as be an effective tool for companies that are looking for a great office space structure that is also a great real estate bargain.
Market Value Monitoring
One of the shortcomings of some businesses when looking at investing in office space is to not get substantive information on a particular commercial location which can result in that company actually suffering a financial loss in the acquisition of such office space. Market value monitoring is very important to get an up-to-date and accurate economic basis for evaluation purposes. No company would want to be tied to a lease or acquire property that is over-priced; neither would a building owner want to have a lease that is under-priced. To protect the interests of both parties, the projected value as well as market expectations should meet together at a common point and this can only be realized through close market value monitoring.
Commercial Comparable Sales
Property valuations have three major types of approaches: sales comparison, cost and income. A sales comparison approach is the most commonly used one for valuation purposes. It is easy to understand and is usually used for price comparison on office leases and other types of real estate appraisals.
This particular process involves two different steps: finding or selecting comparable properties and then making any necessary adjustments to the figures.
Selecting any commensurate sales is the most difficult part of the approach. Since it is so important to an accurate analysis, it involves research and investigation to find properties that most closely resemble or equate to the property being considered.
The next step of making appropriate adjustments involves a variety of techniques that can be used by an appraiser. One of the most widely performed techniques of this approach is the matched pair analysis.
Matched Pair Analysis
Matched pair analysis is one of the varieties of effective techniques to make appropriate adjustments to comparable sales. This technique involves three steps:
-
Locating - The first step in performing this analysis is to find sales that are comparable in all areas except for the particular item that is a potential determining factor. It would be preferable to find at least three sets of identical pairs for each subject that is being compared. This is frequently not feasible, so many times adjustments must be made to bring the compared objects as close to even as possible.
-
Evaluating – The next step is to assess the selling price of each one of the pair, either by the gross sales price or the sales price per square footage or size.
-
Reviewing – The last step is to review the outcome of this comparison to see if it is a logical result such as similar units in which one unit has extensive outside landscaping and the other does not. Is the price of the first one reasonable for extensive landscaping – or not?
Finding valuable office space for a business and being able to do some type of comparison is not always an easy thing to accomplish. Utilizing the above form of comparison can be a valuable addition to a company’s arsenal against high property leasing or purchasing costs. This tool can definitely give you some leverage in the negotiation process when searching for economical office space!
C. Michael Hunter is an expert in commercial real estate and office space information. To find out more about Dallas Office Space, go to the main website at: http://www.lcrgusa.com/.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Google SEO Updates 2024 Jackyan
- Cost-Effective Gardening: Tips for Enhancing Your Garden on a Budget
- Keeping Your Garage Door Running Smoothly: A Guide to Drum Replacement with GarageDoorMagnolia
- When Your Garage Door Goes Rogue: Off-Track Repair in Tacoma and Seattle
- Same Day Service? Kiki Garage Door Repairs Your Garage Door Fast in Sammamish, WA
- Cost-Effective Strategies for Business Owners in 2024: Maintaining Efficiency Without Reducing Staff
- Navigating Compliance for Personal and Professional Contributions
- Smart Savings: The Benefits of Buying Out of Season
- Youtube To MP3 Converter -- Free
- The Benefits of Outdoor Training
- A Fashionable, Artistic, and Modern Adventure: Three Days in Paris
- Why buy stock footage on mediaCastpro? Here are the benefits.
- GoPDF An Online PDF Editor Releases Mobiles Apps Compatible with iOS & Android: A Faster Solution for PDF Editing
- The Best AI Logo Generators in 2024
- How to prepare for a house clearance, a few tips from experts
- Adapting to Rising Parcel Rates in 2024 with Business Central and Order Ship Express
- Not All LED Lights Are Created Equal
- Zoviz Launches New Solutions Day by Day to Users as An AI Logo Maker
- Campervan Maintenance: All You Need to Know
- Fighting the Silent Epidemic: Safeguard Your Child's Future with Vitamin D Screening at KinderCure | Dr. Garima Mengi
- 5 Inspiring Stories of Women Who Achieved Gorgeous Lashes with Careprost Eye Drops
- Is Your Finance Strategy Ready for ERP Software?
- A Beginner's Guide to Starting a Career in Web3
- The Vital Role Of The Courier Industry: Connecting People, Businesses, And Communities
- Learning From Successes And Setbacks: The Importance Of Post-Bid Analysis In Professional Bid Writing
- Music And Identity: Exploring The Role Of Music In Shaping Culture And Identity
- Demystifying Dental Myths: Separating Fact From Fiction
- Expert and Little Known Tips for Limestone Floor Maintenance
- Explanation of how to improve the quality of low-resolution videos
- Do Compelling Marketing Pictures Unlock Sales Potential?