Tag: Appraisals

How Accurate Are Bank Commercial Real Estate Appraised Values?

Appraisal Accuracy

A look at 134 commercial real estate loans that were just sold last month with recent appraisals reveals some interesting data points for banks. The sale price was higher by about 10% than the appraised value. In looking at the details, appraisers placed a heavier weight on current capitalization rates versus investors that tend to look more forward. This begs the question – how accurate are commercial real estate appraisals and should banks be basing loan amounts on them?

 

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