​Determining Real Estate Asset Value

Is your credit score low? Financial history not so squeaky-clean? While traditional lenders might deny you for a loan based on those two factors, there IS still hope. Commercial asset-based lenders like Riverdale Funding, LLC do not base decisions on personal financials, instead on the value of your real estate. We don’t believe a lack of funding should stand in the way of business, and we don’t hold your past against you. So how do we determine the value of your property? We get two opinions of value done to cover all bases, an appraisal and a broker’s price opinion. We trust only the most credible and accredited companies to perform these real estate service assignments.

Most lenders choose to order an appraisal on the property. This is to determine the property’s value or discover any issues that would decrease the value. Property value is based on factors as location, amenities, condition and recent comparable sales of similar local properties. The appraiser visits the property, walks-through, takes interior and exterior photos, and makes notes of the properties condition. The appraiser also provides exterior photos and property value information on the most similar properties. Sometimes the demographics of the area are also included, for example the climate, population, poverty level, crime rate, estimated per capita, median household income, etc. These factors can play a large role in determining property value. The size of the property determines how long the visit takes the appraiser and the fee for their services. Our appraisers are certified by the states they serve and are registered with the Appraisal Institute. Because we only provide loans to businesses or corporate entities, our appraisers cannot be SRA designated only, which means they only have expertise in residential property analysis and evaluation. The appraisers we work with are MAI designated. The MAI designation is held by individuals who are experienced in the valuation and evaluation of not only commercial, but industrial, residential and other types of properties, and who advise clients on real estate investment decisions.

Riverdale chooses to order a BPO or a broker’s price opinion as well as an appraisal. Also known as a broker’s opinion of value (BOV). This is another tool to confirm and determine the property’s value. This report is less detailed and much briefer than an appraisal. While an appraiser provides all a properties details, a broker knows the current real estate market conditions. A commercial real estate broker or qualified realtor will provide these reports. Our brokers hold a broker’s license and are registered with the National Association of Real Estate Brokers and realtors with the National Association of Realtors. The BPO will include a suggested listing price and offer different values depending on the amount of time the property sits on the market. The report will also include similar properties in the area and how long they were on the market, plus what they sold for.