What You Need To Know About Commercial Appraising Vs Residential Appraising

by | Nov 6, 2020 | Appraisal articles

When you are planning to buy or sell residential or commercial property, it is necessary to conduct a real estate valuation. The appraisal process helps you define the price and value of your property in the right manner. You can ensure that your home or commercial property is worth the price at which you are purchasing it or selling it.

Further, property valuation is an imperative consideration when you are refinancing your mortgage or a home loan or enrolling for private insurance for loans.

However, since the appraisal process is extremely important, it is necessary to receive every possible information on commercial appraisal vs residential. This is why we have clarified the difference between residential and commercial real estate appraisal. Dive in to explore more about commercial appraisal vs residential.

Commercial Property Appraisal

Commercial real estate appraisal is nothing but an assessment conducted to understand the value of your commercial property. This property appraisal report can be prepared for various types of buildings, such as brick-and-mortar stores, apartments, or vacant land.

Generally, when you are purchasing a property, commercial property valuation is necessary and sometimes, mandatory. This is because the information revealed in the property appraiser’s report helps in highlighting the actual valuation of the property.

Residential Property Appraisal

Similar to commercial property valuation, a residential appraisal is also a process of finding the monetary value of the residential property. This includes property that is used by the buyer or seller to reside.

Even home appraisal is important when you are purchasing or selling a property. It protects the lender by telling them the actual valuation of your home. This helps in assessing whether the mortgage is feasible or not.

The major difference between commercial and residential property appraisal is the process that is carried out. The real-estate appraisal software may consider factors based on commercial factors and residential factors. In commercial property, market conditions may be evaluated, while residential property evaluation might consider conditions that include neighborhoods, lifestyles, and more.

The Difference Between Commercial And Residential Appraisal

The real estate industry is changing as we speak. This dynamic industry can never offer you two same sales or purchases because of the complexities of valuation and worth. This is why we have discussed commercial appraisal vs residential below. Read on to know how these two processes are different.


When you are getting a home appraisal, factors considered are varied. The appraiser may understand the neighborhood, location, home size, etc. to know the value. In commercial appraisal, the appraiser may calculate the value based on other criteria, such as rental forecasts, selling price, income, etc.


The complexity of evaluating commercial and residential properties is different.

Here’s why:

You need to put in more effort to maintain a commercial property. It is complicated to build, maintain, and operate a commercial building. Hence, its appraisal process is also time-consuming and complex. Additionally, the appraiser needs to customize the process depending on your property, which adds to the resources required.

The process of commercial property appraisal can take up to a month.

Maintaining and operating a residential property, on the other hand, is not such a big hassle. Therefore, its appraisal process is also routine. A lot of homes have similar varying factors, which reduce the time and effort needed.

The process of residential property appraisal can take up to a week.

Report Type

The report generated in both commercial and residential properties is also different. Since the commercial property needs more time, and it includes more factors like future effectiveness, it has a lengthy report containing why a certain valuation is perfect for this type of property.

In the case of a residential property, this is not so. The factors are few, so the entire report can be submitted in 15 pages.


The cost of the home and commercial appraisals is also varied. It is obvious from the above discussion that residential property appraisal requires less money compared to commercial property appraisals.

So, if you accidentally use commercial appraisal in place of a residential appraisal, you may end up reducing the cost-effectiveness of the process. Read on to know how you can select the right appraiser.

What Type Of Appraiser Do I Need?

If you are purchasing or selling any of the following, then you should consider a commercial registered valuer.

● Buildings

● Office real estate buildings

● Shopping centres

● Condominiums

● Industrial properties

● Land for sale

If you are purchasing or selling a house to live in, then you should consider a residential registered valuer.

What’s More Valuable: Residential or Commercial Land?

Residential properties are purchased for personal use. Sometimes, they’re also purchased for leasing. You can gain optimum returns when purchasing residential properties for leasing.

On the other hand, commercial properties are purchased for commercial use or renting. Hence, favourable returns can be received on real estate like warehouses, office spaces, institutional property, etc.

Depending on your requirements, both commercial and residential properties are good investments. With a residential property, you don’t have to face the brunt of an economic downturn that severely. But, in the case of a commercial property, regular income can be at risk of fluctuation.

As an aware investor, you should consider every factor before deciding which property type is more valuable for you.


Every property valuation method is designed to offer you optimum support when you are buying or selling a property. However, knowing the distinction between commercial appraisal vs residential will help in using the right real estate appraisal method at the right time. When you know the difference between the two, you can fully extract value from your real estate appraisal services.

So, check the above data and select the right property appraisal method for your real estate evaluation.


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