What is a Certified General Real Estate Appraiser?
A Certified General Appraiser is a licensed professional that is qualified to appraise commercial real property. This may
make you wonder what is real property and does that mean some of my property might not be “real”? In this context
“real property” is synonymous with “real estate”. Real estate is a fixed, tangible asset.
Many business owners need equipment to conduct business and this kind of property is called furniture, fixtures, and equipment or FF&E for short. Sometimes we call it “personal property”. For a hotelier the FF&E may consist of beds and coffee makers. A convenience store is going to have inventory. A manufacturing facility may have cranes, work benches, and machines. The tools you have in the repair shop to keep this equipment running are also personal property. These assets are tangible; you can put your hands on them and they may or may not be attached to your building. If you can safely remove your special equipment from the building without structural damage, it is personal property. As a business owner, I am sure you know what your equipment cost you to acquire and maintain. A discussion of The Difference Between Cost And Value is here.
For those of you who are curious, here is a quick word about “intangible assets”. There are a lot of terms for this idea and they all mean the same thing. You may have heard the term “business value”, “going concern”, or “enterprise value”. They all mean the intangible assets of a company. In some cases, it is your company’s reputation. In others, it is the client list or talented workforce that inspires investors to pay more for your company than the bricks and mortar plus cost of inventory. A Certified General Real Property Appraiser needs to be able to identify these tangible and
intangible assets to make sure they give you a value for the real estate.
The dirt under your building, your building, and your parking lot are real property. A Certified General Real Property Appraiser is qualified to identify the components of your business and value the real property. We are guided in our practice first and foremost by USPAP, the Universal Standards of Professional Appraisal Practice. Since each property and appraisal problem is unique, USPAP is not a checklist or how-to manual. It is a guiding principal and collection of generally accepted standards for the presentation of our findings, ethical standards, and record-keeping requirements. It leaves out the very important step of how to collect and analyze the data. This knowledge is acquired through a combination of classroom training and hands-on experience.
A Certified General Real Estate Appraiser has taken numerous courses on methodology and tactics for solving appraisal problems. These courses help an appraiser fill their mental “tool-box”. Like a carpenter in their workshop, we don’t use every tool on every assignment, but a skilled professional will have a wide range of tools for answering a wide range of questions. A combination of classroom training and working closely on a team with experienced appraisers on many commercial assignments is the only way to become a licensed Certified General Appraiser. It is important to note that a Certified General Appraiser may not be qualified to appraise a house even though there is a lot of overlap in technique. The work experience is a key component in gaining competency. To become a Certified General Real Estate appraiser, a documented work log is submitted to the State along with proof that the continuing education requirements have been completed. For more on what techniques and tools an appraiser needs, see our article on Cost Of Commercial Appraisals here.