 |
Access to finance and more importantly property valuations have been causing major concerns and issues in recent times for investors looking to buy commercial property. A lack of property sales evidence in the market, recent law suits against valuers, and falling property values during the Global Financial Crisis has lead to a trend of conservative valuations on commercial property. |
This in turn has caused problems with commercial property transactions as valuations are not meeting the purchase price. Our 4 tips will assist investors looking to buy commercial property.
1. Recent comparable market evidence;
Before you buy commercial property investors need to obtain as much recent comparable sales and leasing market evidence as possible. This evidence may be provided to the valuer on the chance that they may not have had the same details. The best way for an investor to obtain this information is to speak with all the selling agents, leasing agents and valuers who specialise in the specific type of property being considered along with accessing property sales records at online databases.
2. Select the right valuer;
It is very important that the valuer who will be assessing the property has the relevant experience. Investors looking to buy commercial property need to speak with their financier and obtain contact details of all the valuers on their panel. All the valuers on the panel should be interviewed to assess which one has the most experience with the specific type of property being considered. For example; if an investor is looking to buy a commercial property such as a medical centre, then the valuer should have recent experience in conducting valuations on medical centres.
3. Clear communication;
An investor looking to buy commercial property must maintain clear communication with the valuer throughout the entire process of the valuation. A valuation is ultimately based on facts and the basis of good communication is to identify what facts or information the valuer requires. This information can be specific details on; the property, recent comparable market evidence for leasing and sales, the tenant, and the lease. One way an investor looking to buy commercial property can build rapport with the valuer is to meet with them on site when they do their inspection of the property.
4. Finalising the valuation;
Once a valuation has been submitted to a financier it is very difficult if not impossible to change. Therefore it important for an investor looking to buy commercial property to clearly understand the valuation before it is submitted. An investor needs to understand what evidence has been used, what problems may have been identified, how did the valuer arrive at the final value and ultimately what the value may be.
If the valuer has identified any issues or problem areas, then investor needs to assess if there is merit in their findings or if they may not be using the right information. If you feel that the comments from the valuer are unjustified you need to consider canceling the valuation and appointing another valuer. The cost of another valuation may pale in comparison to the cost a poor valuation can do to the level of finance that your financier may be willing to provide based on the valuation presented.
Prosper Group Australia's leading commercial property buyers agents assist investors buy commercial property successfully. To learn more about buying commercial property contact us on 1300 663 373 or for more valuable tips and information visit http://www.prospergroup.com.au/blog/ or website http://www.prospergroup.com.au
