Charge for commercial appraisal?

[Krishna Rayapudi]

Hi All, My bank contact said he will charge about $5000 to get an appraisal for a medical office building about 6000 sqft. Wondering if this is too high. Is it not based on price and size of the property? Thanks for your help

[Joel Owens]

The bank or lender if they are any good will usually ( bid out ) the process. They generally have 2 to 3 commercial appraisal companies they frequently use.

The cost of the appraisal will depend on what is being appraised and the turn around time in weeks desired for the report to come in. The bids will come in and say XX bid, and XX turn around time. The lender should then present the options and ask which one you want. Timelines come into play based on any rate locks you have with days left and also the due diligence period remaining and other contingencies in the purchase and sale contract.   

If you want it in say 10 days versus 3 weeks the cost could very well be 5,000.  I have seen them go from 2,000 to 7,000 or more depending on what it is and the complexity for loan purposes. Getting an appraisal just to get a value when you already own something is different.

When a lender is hanging their hats on an appraisal for loan purposes the appraisal company has more potential liability.