Price Valuation - What We Do
We will use several different methods to determine the value of a property. Below are some of the ways we determine the best possible value.
1. Sales comparables of similar size and quality of property.
2. Current active listings of similar size and quality of property.
3. Price per unit analysis.
4. Price per square foot analysis.
5. Market rent analysis
6. Gross multiplier and cap rate analysis.
7. Cash on cash return and 5 year potential profit projection.
8. Analysis using Lenders underwriting guidelines.
The lender wants to be sure that the property is worth at least a certain ratio relative to the amount of debt being incurred. In commercial real estate, most lenders want to see at least a 65% to 70% loan-to-value ratio before signing off on a mortgage.Sales comparables and active listings are obtained from multiple sources such as the Multiple Listing Service, Loopnet.com, CoStar and title company records. By using these multiple sources of information we guarantee we are acquiring the most accurate and complete information available to determine the pricing of the properties we market. We research the most similar size and quality of property located in the same area as the subject property and then work on making adjustments for age, size, condition and location. We make plus or minus value adjustments for these factors. Next we cross reference these valuations with the prevailing cost per unit, cost per square foot, gross multiplier and cap rate of the sold comparables revealed by our research. We will then present our value determination to the seller and discuss the best price to market the property so it is sold at the highest price in the least amount of time.
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