Getting the best real estate appraisal for your childcare real estate for the best price is a function of four things.
- Knowing the type of appraisal you need
- Hiring the right appraiser
- Reviewing the appraisal.
- Researching and asking the right questions of your appraiser.
First, not all appraisals have the same purpose or cost so it’s important to tell the appraiser exactly what you need from your appraisal. If you simply ask for “an appraisal of your childcare”, then you can receive bids that may range from a $1,000 to more than $12,000 for a single “childcare”. In this circumstance, you are looking for an appraisal that tells you the value for your land and building(s) only. This type of appraisal is commonly referred to as a “Bricks and Mortar” appraisal (also called a Limited Use or Restricted Use Appraisal). All markets are different, but this type of appraisal will usually cost about $1,500, and it will tell you the current market value of your land and building(s) only—not the value of your business component.
Second, hiring the right appraiser means knowing that all appraisers are not the same. When given the opportunity, try to hire appraisers who are “MAI” qualified. While the MAI designation isn’t required to get a professional appraisal, appraisers with this designation tend to be better qualified for the work. When you are interviewing appraisers, ask them if they typically do all of their work for banks. It’s not always true, but many appraisers who work exclusively for banks tend to provide appraisals that are less focused on maximizing the market value of properties and more focused on collateralizing the bank loan amounts of those properties.
Third, many people receive the appraisals they buy and accept the appraisal as perfect. Many times they are perfect. However, it is a good practice to review the appraisal and see if the appraiser used the best comps available for your property—not just an acceptable number of comps. General information on similar properties sold in your area can be accessed via the internet, a friendly local real estate broker, business brokers specializing in early education properties or simply people you know who have sold their childcare properties.
Fourth, if you find information that you feel should have been used in your appraisal, contact your appraiser as quickly as possible and ask him or her to revise the appraisal accordingly. As long as the new information is applicable to your property, the appraiser will normally revise the appraisal at no cost to you. Remember, whether the increase in the appraised value of your property is $5,000 or $50,000, it will be value earned with a relatively small amount of effort on your part.
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Listen to an enhanced 2-part audio version of this article below...
Know the type of appraisal you need and how to hire the right appraiser.
Review the appraisal and revise the appraisal accordingly.