Chicago Business Appraisal

Chicago Business Appraisal

Obtaining a thorough and fair business appraisal is critical to lenders and property owners alike.  The high finances and the high stakes involved demand that those involved do their homework. To sign off on high-stakes deals involving the sale of a business, you need to trust your appraiser and appraisal throughout the process, and for that, you need an experienced Chicago business appraiser on your side.  

The Critical Nature of Appraisals

The best way to determine the value of a company that you intend to finance, purchase, or sell is by working with a reputable appraisal company with significant experience in this arena. Regardless of the price set by the real estate agent involved – who probably isn’t an appraiser – it’s imperative that you have a well-founded appraisal that backs up the value involved in your transaction. 

The Three Primary Methods of Appraisal

When it comes to having a major purchase like real estate appraised, there are three primary methods that are typically employed, and the method chosen is usually based on the kind of property involved and the use envisioned for that property. These methods include:

• The Income Capitalization Approach – The income capitalization approach is naturally focused on properties that generate income, such as commercial and residential rental properties, shopping centers, and the like. In the income capitalization approach, a value is reached based on the property’s potential for generating revenue, which is the net operating income, and on what the investors’ rate of return is expected to be. In this appraisal approach, properties such as the condition of the real estate and its location don’t play a significant role in and of themselves. 
• The Overall Cost Approach – The overall cost approach considers the actual value of the property in question, including the value of the land and all improvements made – minus any depreciation. Under this mathematical approach, the value typically won’t outpace the cost of building a similar property from the ground up. 

• The Market Approach (or Sales Comparison) – The market approach – or sales comparison – is most often used by real estate agents who are valuing family homes for a sale price that is based on comparable homes. This approach typically targets properties that were sold within the preceding year and that are similar not only in size and location but that have also experienced similar market conditions. For example, two properties that are nearly identical cannot be expected to be similarly valued if one is sold during a market slump, and the other is sold during a market boom.

Work Closely with an Experienced Chicago Business Appraisal Company

Whether you’re financing a business purchase or are on the purchasing end of the deal, you want to move forward with confidence. The dedicated and certified appraisers at Allstate Appraisal in Chicago are committed to providing you with an appraisal that offers unwavering quality with an emphasis on compliance. As one of the longest-running valuation businesses in the nation, you can trust us to provide you with the valuation services that you need and can thoroughly rely upon. For more information, please don’t hesitate to contact us today.