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Fill in Your Review Commercial Appraisal Template

The Review Commercial Appraisal form is a comprehensive tool used to evaluate the quality and accuracy of an appraisal report for commercial properties. This form helps ensure that appraisals meet established standards and provides a structured approach to assessing various aspects of the property, including its value, location, and market conditions. By utilizing this form, reviewers can systematically identify strengths and weaknesses in the appraisal process.

Table of Contents

The Review Commercial Appraisal form serves as a comprehensive tool designed to evaluate the quality and accuracy of appraisal reports related to commercial properties. It encompasses various sections that guide the reviewer through critical aspects of the appraisal process. Initially, the form captures essential details about the property, including its name, location, and the type of appraisal report being assessed, whether it be a narrative, printed form, or another format. The reviewer is prompted to consider the purpose of the appraisal, the value sought—such as market value—and the date of that value. Furthermore, the form addresses property identification, ownership, and assessment, ensuring that the report adequately describes the property’s legal status and any pertinent financial information, such as purchase prices and existing restrictions. The location analysis section encourages a thorough examination of the property's surroundings, including regional trends and potential hazards. Additionally, the form evaluates the property description, focusing on improvements and site characteristics, while also addressing zoning and highest and best use considerations. The valuation section allows the reviewer to assess various approaches to value, including cost, sales comparison, and income capitalization methods. Finally, the form concludes with a section for the reviewer’s recommendations, ensuring that all aspects of the appraisal report are systematically analyzed and rated. This structured approach facilitates a clearer understanding of the appraisal's soundness and reliability.

Sample - Review Commercial Appraisal Form

COMMERCIAL APPRAISAL REVIEW FORM

The appraisal report which is the subject of this review is briefly identified and described as follows:

Name of Project/Property __________________________________________________________________________________________

Location/Legal __________________________________________________________________________________________________

Type of propert ____________________________________________________________________ ❐ Existing ❐ Proposed Construction

Name of Appraiser _________________________________________________________________ Telephone ____________________

Address	_______________________________________________________________________________________________________
Report Addressed to: _______________________________________________________________ Telephone ____________________
Address	_______________________________________________________________________________________________________
Type of Appraisal Report: ❐ Narrative ❐ Printed Form ❐ Other (identify) ___________________________________________________

Section I — Purpose and Function of Appraisal

Value Sought:	❐ Market Value	❐ Other (identify)	Date of value:	❐ Current	❐ Future	❐ Past
		______________	Definitions Given For:	❐ Value Sought	❐ Interest To Be Valued
Interests Valued:	❐ Fee Simple	❐ Leased Interest		❐ Market Rent	❐ Other (identify)
	❐ Easements	❐ Other (identify)			__________________
		______________	Assumptions and	❐ Standard	❐ Consistent with
Real Estate Valued	❐ Land	❐ Improvements	Limiting Conditions:		Valuation Process
	❐ Ground Lease	❐ Personal Property		❐ Third Party	❐ Unreasonable or
	❐ Other (identify)_______________			Report	Excessive
Comments:

______________________________________________________________________________________________________________

Section II — Property Identification, Ownership and Assessment

Does the report adequately contain or identify:	Yes	No	N/A			Yes	No N/A
Property Location/Address:	❐	❐	❐	Owners of Record		❐	❐	❐
Legal Description	❐	❐	❐	History of Ownership
Real Estate Tax Information	❐	❐	❐	If Applicable to Subject Property:
Assessments, Bonds, etc.	❐	❐	❐	Amount of Purchase Price	❐	$____________
Existence of:				Pending Sales Price	❐	$____________
Deed Restrictions	❐	❐	❐	Asking Price	❐	$____________
Covenants, Conditions, Restrictions	❐	❐	❐	Option Price	❐	$____________
Moratoriums	❐	❐	❐	Other	❐	$____________
Comments:

______________________________________________________________________________________________________________

Section III — Location Analysis

Does the report adequately describe or identify:		Does report:
Region	❐ Yes ❐ No ❐ N/A	Sum up and rate the above area	❐ Yes ❐ No ❐ N/A
City	❐ Yes ❐ No ❐ N/A	Identify and discuss important trends	❐ Yes ❐ No ❐ N/A
Neighborhood	❐ Yes ❐ No ❐ N/A	Identify nuisances or hazards	❐ Yes ❐ No ❐ N/A
Comments:

______________________________________________________________________________________________________________

Section IV — Property Description

Comment upon the descriptions and analysis of the following:		IMPROVEMENTS:
SITE:		Adequate description of physical features ❐ Yes ❐ No
Adequate description of physical features❐ Yes ❐ No		Attention given to:
Identification of encumbrances	❐Yes ❐ No	Quality	❐ Yes ❐ No
Does the report state adequacy of site for		Functional Utility and Appeal	❐ Yes ❐ No
existing or proposed use	❐Yes ❐ No	Age	❐ Yes ❐ No
Utilities available	❐Yes ❐ No	Condition	❐ Yes ❐ No
Special Problems:		Hazardous Conditions	❐ Yes ❐ No
Flood	❐Yes ❐ No	ZONING:
Environmental Hazards, Seismic, Toxic etc.		Statement	❐ Yes ❐ No
Other (identify)_________________	❐Yes ❐ No	Definition	❐ Yes ❐ No
Comments:

______________________________________________________________________________________________________________

Section V — Highest and Best Use

Definition	❐ Yes ❐ No	Does property conform to zoning and
Components	❐ Yes ❐ No	neighborhood	❐ Yes ❐ No
Conclusion of Highest and Best Use______________________		Is use legal and physically possible	❐ Yes ❐ No
Current zoning ______________________________________		Has the report in this or other sections discussed:
Status zoning change _________________________________		Marketability (supply-demand, market trends,
Status of building permit (if possible construction) ____________		absorption occupancy levels)	❐ Yes ❐ No
Does report discuss feasibility/profitability	❐ Yes ❐ No	Other (identify) ____________________________________
		Were other studies/reports considered	❐ Yes ❐No
Comments:

______________________________________________________________________________________________________________

Copyright © by the National Association of Review Appraisers and Mortgage Underwriters 1224 North Nokomis NE, Alexandria, Minnesota,USA. This formReview Form No. 4002 may be reproduced without written consent, however, the “National Association of Review Appraisers and Mortgage Underwriter’s must be acknowledged and credited.

SECTION VI — Property Valuation

Comment and rate the approaches to value:
COST APPROACH:	Satisfactory		Unsatisfactory	DISCOUNTED CASH FLOW ANALYSIS (DCF)
Format		❐	❐		Satisfactory	Unsatisfactory
Adequacy of data		❐	❐	Format	❐	❐
Source of costs		❐	❐	Adequacy of data and support for:
Land value estimate		❐	❐	Holding Period	❐	❐
Estimated cost new		❐	❐	Growth Rates	❐	❐
Depreciation estimate		❐	❐	Discount Rate	❐	❐
SALES COMPARISON APPROACH:				Development of Cash Flow Estimates ❐		❐
Format		❐	❐	Reversionary Value	❐	❐
Adequacy of data		❐	❐	Other Methods of Processing Income
Sources of data		❐	❐	Stream (Mortgage Equity, Band of
Summary of sales table		❐	❐	Investments, etc.)	❐	❐
Use of adjustment grid table		❐	❐	RECONCILIATION:
Comparative analysis of sales		❐	❐	Indicated values are:
INCOME CAPITALIZATION APPROACH:				Cost Approach	$ __________
Format		❐	❐	Sales Comparison Approach	$ __________
Selection of proper capitalization				Income Approach	$ __________
method		❐	❐	DCF Analysis	$ __________
Adequacy of data and support for:				Other (Pending Sale, etc.)
Comparable Rentals		❐	❐	Value Conclusion		$ ________
Vacancy and Loss Factor		❐	❐	Allocation as Follows:
Operating History		❐	❐	Land	$ __________
Rent Roll		❐	❐	Improvements	$ __________
Income Estimate		❐	❐	Personal Property	$ __________
Expense Estimate		❐	❐	Other	$ __________
Net Operating Income		❐	❐	Total Value		$ ________
Capitalization Rate		❐	❐

Comments:

______________________________________________________________________________________________________________

Section VII — Other Report Requirements

Does the report contain a certification ❐ Yes		❐ No	Does the principal appraiser make
Is the report co-signed	❐ Yes	❐ No	statement of concurrence with value
Did the principal appraiser sign the			conclusion	❐ Yes	❐ No
report	❐ Yes	❐ No	Does the report contain appraiser(s)
Did the principal appraiser personally			qualifications	❐ Yes	❐ No
inspect subject property	❐ Yes	❐ No

	Section VIII — Final Rating of Appraisal

	Acceptable	Unacceptable		Acceptable	Unacceptable
Report Format			Property Valuation:
Readability and neatness	❐	❐	Feasibility/Profitability	❐	❐
Mathematical accuracy	❐	❐	Market Trends	❐	❐
Exhibits (Photos, Maps, etc.)	❐	❐	Cost Approach	❐	❐
Appraiser’s analytical ability	❐	❐	Sales Comparison Approach	❐	❐
Purpose and function of appraisal ❐		❐	Income Approach	❐	❐
Property identification	❐	❐	DCF	❐	❐
Locational analysis	❐	❐	Reconciliation	❐	❐
Property Description	❐	❐	Date of Appraisal	❐	❐
Site	❐	❐	Overall Rating of Appraisal
Improvements	❐	❐
Highest and Best Use	❐	❐

Brief Comments on Unacceptable Ratings:

______________________________________________________________________________________________________________

Section IX — Reviewer’s Conclusions — Recommendations

Scope of Review:			If reviewer does not concur with the soundness if conclusion, then
Read report	❐ Yes	❐ No	what is the recommended action:
Interviewed appraiser	❐ Yes	❐ No	❐ Totally reject appraisal
Field Review	❐ Yes	❐ No	❐ Have appraiser rework, revise, update the appraisal
Does the Reviewer concur with			❐ Have another appraisal prepared by someone else
the soundness of conclusion:	❐ Yes	❐ No	❐ Other

Concluding Comments:

______________________________________________________________________________________________________________

Reviewer’s Signature _____________________________________________________________________________________________

Name of Reviewer __________________________________________________________________ Date ________________________

Position ___________________________________________________________________________ Department __________________

Address __________________________________________________________________________ Telephone ___________________

City, State, Zip __________________________________________________________________________________________________

Copyright © by the National Association of Review Appraisers and Mortgage Underwriters P.O. Box 879, Palm Springs, California, 92263 USA. This form	Review Form No. 4002
may be reproduced without written consent, however, the “National Association of Review Appraisers and Mortgage Underwriter’s must be acknowledged and credited.

↓ Review Commercial Appraisal PDF

File Specs

Fact Name	Description
Purpose of the Form	The Review Commercial Appraisal form is designed to evaluate the quality and accuracy of an appraisal report for commercial properties.
Key Sections	This form includes sections that address property identification, location analysis, property description, and valuation approaches.
Legal Compliance	The form adheres to the regulations set forth by the National Association of Review Appraisers and Mortgage Underwriters.
Use of the Form	It is utilized by appraisers, lenders, and reviewers to ensure appraisals meet industry standards and provide reliable value assessments.

Review Commercial Appraisal - Usage Guidelines

Completing the Review Commercial Appraisal form requires careful attention to detail. Each section must be filled out accurately to ensure a comprehensive review of the appraisal report. Follow these steps closely to ensure all necessary information is provided.

Begin by filling in the Name of Project/Property and Location/Legal sections at the top of the form.
Indicate the Type of Property by checking the appropriate box for either Existing or Proposed Construction.
Enter the Name of Appraiser, their Telephone, and Address.
Provide the Report Addressed to, including the Telephone and Address.
Select the Type of Appraisal Report by checking the appropriate box (Narrative, Printed Form, or Other).
In Section I, indicate the Value Sought by checking either Market Value or Other.
Specify the Date of Value by checking Current, Future, or Past and filling in the date if applicable.
Check the appropriate boxes for Definitions Given For and Interests Valued.
Complete the Assumptions and Limiting Conditions section by checking the relevant boxes.
Provide any Comments regarding the valuation process.
In Section II, answer the questions regarding Property Identification, Ownership and Assessment by checking Yes, No, or N/A.
Fill in the Amount of Purchase Price and any other applicable financial details.
In Section III, evaluate the Location Analysis by answering the questions with Yes, No, or N/A.
Proceed to Section IV and comment on the Property Description based on the provided criteria.
In Section V, assess the Highest and Best Use by answering the relevant questions.
Section VI requires you to comment and rate the Property Valuation approaches.
In Section VII, confirm whether the report contains the required certifications and signatures.
Provide an overall rating in Section VIII by marking Acceptable or Unacceptable for each category.
In Section IX, summarize your Conclusions and Recommendations based on the review.
Finally, sign the form and provide your name, date, position, department, address, and telephone number.

Your Questions, Answered

What is the purpose of the Review Commercial Appraisal form?

The Review Commercial Appraisal form serves as a tool for assessing the quality and accuracy of a commercial appraisal report. It allows reviewers to evaluate various aspects of the appraisal, including property identification, valuation methods, and compliance with relevant standards. This form helps ensure that the appraisal meets the necessary requirements for financial decision-making, risk assessment, and property valuation in real estate transactions.

What information is required to complete the Review Commercial Appraisal form?

To complete the form, several key pieces of information must be provided. This includes the name and location of the property being appraised, the appraiser’s details, and the type of appraisal report being reviewed. Additionally, the form requires information about the purpose of the appraisal, the value sought, and various property characteristics such as ownership history, zoning, and any encumbrances. Specific sections also ask for ratings and comments on valuation approaches, property descriptions, and overall report quality.

How does the form assess the valuation methods used in the appraisal?

The form includes a dedicated section that evaluates different valuation approaches, such as the Cost Approach, Sales Comparison Approach, and Income Capitalization Approach. Reviewers are asked to rate the adequacy of data, the format of the analysis, and the selection of appropriate methods. By providing comments on these aspects, the reviewer can highlight strengths or weaknesses in the appraisal's valuation process, ensuring that the conclusions drawn are well-supported and reliable.

What actions can a reviewer recommend if they do not agree with the appraisal conclusion?

If a reviewer finds that they do not concur with the appraisal's conclusions, they have several options for recommended actions. These may include rejecting the appraisal entirely, suggesting that the appraiser revise or update their work, or recommending that a new appraisal be conducted by a different appraiser. The form provides space for the reviewer to detail their reasoning and any additional comments, ensuring that the appraisal process remains transparent and accountable.

Common mistakes

Incomplete Information: Failing to provide all necessary details, such as the name of the project or property, can lead to confusion. Each section should be fully completed to ensure clarity.
Incorrect Property Type Selection: Selecting the wrong type of property, whether it is existing or proposed construction, can significantly impact the appraisal process. Accuracy in this selection is crucial.
Neglecting to Specify Value Type: Not indicating the value sought, such as market value or other types, can hinder the appraisal's purpose. Clearly stating this helps guide the review process.
Omitting Relevant Comments: Failing to provide comments in sections where opinions or additional information is requested can result in an incomplete review. Comments often clarify the appraisal's context.
Ignoring Property History: Not including the history of ownership or relevant tax information may lead to misunderstandings about the property's value and marketability. This information is vital for a comprehensive appraisal.
Inadequate Analysis of Location: Overlooking the analysis of location and neighborhood trends can skew the appraisal's findings. A thorough understanding of the area is essential for accurate valuation.

Documents used along the form

The Review Commercial Appraisal form is often accompanied by several other essential documents that provide a comprehensive understanding of the appraisal process. Below is a list of commonly used forms and documents, along with brief descriptions of their purposes.

Appraisal Report: This document provides a detailed analysis of the property being appraised, including the methodology used, data collected, and the appraiser's conclusions regarding the property's value.
Property Inspection Report: This report outlines the physical condition of the property, detailing any issues or improvements that may affect its value. It often includes photographs and descriptions of the property’s features.
Market Analysis Report: This document examines market trends and conditions that impact property values. It provides insights into supply and demand, comparable sales, and economic factors influencing the real estate market.
Zoning Compliance Letter: This letter confirms that the property complies with local zoning regulations. It outlines permitted uses, restrictions, and any variances that may apply to the property.
Environmental Assessment: This assessment evaluates potential environmental hazards associated with the property, such as contamination or natural hazards. It helps determine any risks that could affect property value.
Title Report: This document provides information about the legal ownership of the property, including any liens, easements, or encumbrances that may affect its transferability or value.
Lease Agreements: If the property is leased, these agreements outline the terms and conditions of the lease, including rental rates, duration, and responsibilities of both the landlord and tenant.

These documents collectively support the appraisal process, ensuring that all relevant factors are considered when determining a property's value. Understanding each document's role is crucial for a thorough appraisal review.

Similar forms

The Review Commercial Appraisal form is similar to the Appraisal Report form. Both documents serve the purpose of providing a detailed assessment of a property's value. They include sections that identify the property, describe its characteristics, and outline the valuation methods used. The Appraisal Report form typically presents the appraiser's findings, while the Review Commercial Appraisal form focuses on evaluating those findings and ensuring they meet industry standards.

Another similar document is the Property Condition Assessment (PCA). The PCA evaluates the physical condition of a property, assessing its structural integrity and maintenance needs. Like the Review Commercial Appraisal form, the PCA includes a detailed analysis of the property, including its location, improvements, and any potential issues. Both documents aim to provide a comprehensive understanding of a property’s value and condition, but the PCA emphasizes physical attributes more than financial metrics.

The Commercial Lease Agreement is also akin to the Review Commercial Appraisal form. This document outlines the terms under which a property is leased, including rental rates and responsibilities of both parties. While the Review Commercial Appraisal form focuses on valuation, it indirectly supports lease agreements by providing an understanding of market value, which can influence rental rates. Both documents require a clear presentation of property details and terms.

The Comparative Market Analysis (CMA) shares similarities with the Review Commercial Appraisal form as well. The CMA evaluates property values based on recent sales of similar properties in the area. Both documents involve an analysis of market trends and property characteristics. The Review Commercial Appraisal form takes this further by focusing on the appraisal process and ensuring that the valuation meets specific standards.

The Due Diligence Checklist is another related document. This checklist is used during the purchase or investment process to ensure all necessary evaluations are completed. It often includes assessments of property value, condition, and compliance with regulations. Like the Review Commercial Appraisal form, the Due Diligence Checklist aims to minimize risk by providing a thorough examination of the property in question.

The Environmental Assessment Report (EAR) is also comparable. This report evaluates potential environmental hazards associated with a property, such as contamination or zoning issues. Both the EAR and the Review Commercial Appraisal form require a detailed analysis of the property’s characteristics and how they affect its value. While the EAR focuses on environmental factors, the Review Commercial Appraisal form looks at overall property valuation.

Lastly, the Financial Feasibility Study is similar in its objective to evaluate a property’s potential for investment. This study analyzes costs, revenues, and market conditions to determine if a project is viable. Both documents require a thorough understanding of the property and market conditions. The Review Commercial Appraisal form provides the necessary valuation to support the conclusions drawn in a Financial Feasibility Study.

Dos and Don'ts

When filling out the Review Commercial Appraisal form, attention to detail is crucial. Here are some important guidelines to keep in mind:

Do ensure all sections are completed accurately. Missing information can lead to delays or misunderstandings.
Do double-check the contact information for the appraiser and the reviewer. Clear communication is essential.
Do provide thorough comments where necessary. Your insights can greatly enhance the review process.
Do review the property’s history and legal description carefully. This information is vital for an accurate appraisal.
Do follow the format and structure of the form precisely. Consistency aids in clarity and professionalism.

Don't rush through the form. Taking your time ensures accuracy and completeness.
Don't leave any boxes unchecked unless they are not applicable. Indicating "N/A" where necessary is helpful.
Don't use vague language in your comments. Specific feedback is more useful for the appraiser.
Don't forget to sign and date the form. Your signature confirms your review and agreement with the contents.
Don't assume that others will understand your shorthand or abbreviations. Clarity is key.

Misconceptions

Misconception 1: The Review Commercial Appraisal form is only for existing properties.

This is not true. The form can also be used for proposed construction projects. It allows for a comprehensive evaluation regardless of whether the property is already built or still in the planning stages.

Misconception 2: The form is too complicated for non-professionals to understand.

While the form contains technical elements, it is designed to be user-friendly. Clear sections guide users through the necessary information, making it accessible for anyone involved in property appraisal.

Misconception 3: The appraisal review is only concerned with the property's physical condition.

In reality, the review process considers various factors, including market trends, zoning, and highest and best use. This holistic approach ensures a well-rounded assessment.

Misconception 4: Completing the form guarantees an accurate appraisal.

While the form helps structure the review, the accuracy of the appraisal ultimately depends on the quality of the data and the appraiser's expertise. The form is a tool, not a guarantee.

Misconception 5: The form is only relevant for commercial properties.

Although it is tailored for commercial appraisals, the principles and processes outlined can be applicable to various types of properties. Understanding these concepts can benefit anyone involved in real estate.

Misconception 6: The review process is a one-time event.

The review can be an ongoing process, especially if market conditions change or new information arises. Regular updates can provide a more accurate and current assessment of the property's value.

Key takeaways

When filling out and using the Review Commercial Appraisal form, consider the following key takeaways:

Clearly identify the project or property at the beginning of the form. Include the name, location, and type of property.
Specify the appraiser's details, including their name and contact information, to ensure proper communication.
Indicate the purpose of the appraisal, such as market value or other specific needs.
Ensure that the report includes relevant property details, such as ownership history and legal descriptions.
Evaluate the location analysis thoroughly. Identify trends and potential hazards that may impact the property.
Provide a comprehensive description of the property, covering improvements and site conditions.
Assess the highest and best use of the property. Confirm that it aligns with zoning laws and market demand.
Review the valuation approaches used, including cost, sales comparison, and income capitalization methods.
Check for the presence of necessary certifications and signatures from the principal appraiser.
Conclude with a clear rating of the appraisal, indicating whether it is acceptable or unacceptable.

By following these guidelines, you can ensure a thorough and effective appraisal review process.