Commercial Real Estate Market Analysis
Ways to Make the Successful Commercial Real Estate Market Analysis
Making an analysis of the commercial real estate market is highly important and critical, but also it could be a hard one if you do not possess lots of experience in this particular sphere.
We are offering you to look on the key points of performing the efficient commercial real estate market analysis.
In order to obtain the financing form the lender and justify your price during the negotiations, you need to use the pricing of your property as the starting point.¬† Being aware of the property which is likely to sell for allows you to make an efficient and appropriate commercial market analysis.
Choose the similar properties that were occurred during the past 6 months and are in a very near proximity with your target property. Taking into account that the commercial sales may be a few you can include farther away sales or turn to a real estate agent‚Äôs help, who will provide you with a list of the most recently effected commercial sales.
Write down your target property and minimum two other comparable properties. Compose the selling price for each property and add or subtract from each as you address the specific value.¬† You can use this method in order to value such important aspects as the quality of the sq.ft., quality of the interior finish, structure and location etc. Remember to add and subtract from the comparable properties and not from the target property.
As soon as you understand the math the rest of the process will be easy. You need to change the value of the comparable properties in order to develop an estimated selling price for the property you need.
- For the starters, choose an estimated sales price under the target property.
- For instance, your target property may have a brand new built-in kitchen appliances, but Comp B sold with a very poor appliances.
- You need to decide on the value of the target property‚Äôs appliances and add that amount to Comp B‚Äôs column.
- The result will show you what Comp B has sold for, in case its appliances were new.
Analyze the final accounts for the both Comps. The numbers you obtain will show what these properties may have sold for, in case they were very similar in condition, location and size of your target property. No matter what, you need to realize that sellers may set any price, and buyers may offer any amount as well.¬† Such an analysis will demonstrate hypothetically what the property is likely to sell for.
Contact with contractors concerning the repairs appraisal and obtain the prices from the suppliers for such basic things like doors, windows, bathroom fixtures and other key factors to make your property merchandisable.
‚ÄúHence, after all of the above mentioned information you need to be keen to understand the basic valuation factors. Some people use the property‚Äôs fail market value, and others use a percentage of the fair market value.
After all, the key factor of your success could be your determination and the desire to affect the successful financial deal. Full understating of all these key factors will help you to make an adequate and qualifies commercial real estate analysis.
To make comparative analysis include only homes of the same style, such as single-family dwellings versus condominiums. If you cannot obtain adequate information from a local assessor, it is better to find a local real estate agent who has more practice in this deal