What Are You Paying for an Appraisal on Small Commercial Multifamily?

[Brandon Sturgill]

How much do you typically pay for an appraisal fee on a small (less than 10) commercial multifamily property?

[Joel Owens]

This is why there is a certain flow to deals. You back load the really expensive stuff LAST after you have verified numbers and the inspection. No point in dropping bank on an expensive appraisal if the numbers or inspection doesn't check out and the seller doesn't want to reduce the price or alter terms.

Make sure the lender is required to give you a copy of the appraisal. Sometimes the lenders will not give it to you even though you paid for it they ordered it. They do this to try and prevent lender hopping to close on the property. If the lender feels that appraiser is off for market vacancy averages, market rents, building expenses, etc. from the appraisers initial draft  then they have a discussion and sometimes the appraiser will change their report.

Every little nuance in a commercial appraisal is important because it affects LTV on the loan and under writeable cash flow. The prices mentioned are pretty normal. Make sure if you can to get a local appraiser to the area to do the report. They will usually have connections to off market data and get an more accurate report versus a national company who dabbles in that market from time to time with appraising.