As a business owner, there may come a time when you need to let the property go. That’s when appraisals become beneficial. However, many people associate appraisals primarily with selling a property. This isn’t the only time it becomes useful, though.
It is also necessary in other situations, such as contract and title disputes.
Don’t skip the appraisal process in these situations
When dealing with a property, particularly a commercial one, an appraisal is often necessary. It’s not just about setting a fair selling price when selling. There are other important situations where you shouldn’t skip the appraisal process:
- Seeking financing: Lenders will likely require an appraisal to ensure the property’s value covers the loan amount. Without an assessment, securing the funding you need could be a challenge.
- Shareholder or partnership disputes: In the event that you and your business partner disagree on the value of a commercial property, an appraisal may be necessary. It provides an objective basis for resolving your dispute.
- Title disputes: If there’s a claim against your title insurance policy due to an undisclosed lien or other defects that affect your property’s value, an appraisal may be necessary to quantify the loss in value. Without it, you might find it hard to resolve the dispute.
- Contract disputes: Should you find yourself in a contract dispute over the sale of a commercial property, an appraisal may be needed to establish the property’s value when the contract was made. You could be at a disadvantage in the dispute without an accurate appraisal.
These situations illustrate how an appraisal is a critical tool, not just for regular property transactions but also for resolving disputes that may arise while owning and managing a commercial property.
There are risks to forgoing an appraisal
In all cases, not appraising properly can lead to significant financial implications. For example, in litigation, the absence of an appraisal could negatively affect the outcome of your case. If you’re unable to present an accurate value of the property in question, it could weaken your position and potentially result in financial losses or unfavorable terms in a settlement.
Defending your interests in a property dispute can certainly be complex. However, consulting with a legal professional can be beneficial. A legal professional can guide you through the appraisal process, ensuring that it’s conducted correctly and that the results are used effectively in court.
