Selling a commercial property
Helping out a family member trying to sell a commercial property. They have no idea of what it is worth. I reached out to some appraisers and got a range of $800 - $1200 for a desktop appraisal. 

My question is: Aren't desktop appraisals pretty much a commodity? I have a feeling everyone has the same "software" so I'm not sure what value the more expensive appraiser would bring to the table.

2nd question: If we decide to sell directly to the existing tenant, would we need a real estate agent? 
[{"id": "drldvq0", "text": "Some CRE appraisers are a lot better than others. Look for an AMI appraiser and you\u2019ll be in better company.  \nProbably safer to go w/an agent.  ", "replies": [{"id": "drlku6b", "text": "MAI* appraiser", "replies": [{"id": "drlqzpe", "text": "My typing skills are MIA...", "replies": [{"id": "drmf3x4", "text": "lol. I was googling AMI and getting one company matching AMI.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "drll0sf", "text": "Commercial property appraisals are different than single-family homes.  There is no standard \"software\" or template. They are narrative reports. I don't know where you are, but they can be up to $4,000 in CA. MAI certified appraisers will be more expensive, but the value will be more reliable.\n\nYou should use an agent no matter who you sell to. Someone to guide you through the escrow process is invaluable. DO NOT hire a residential agent to sell a commercial property.", "replies": [{"id": "drmfkrm", "text": "Right the $4K ones are the full blown appraisals where the appraiser actually visits the property, does market research etc. I don't think the family members want to shell out that much and so that's why I'm looking towards the desktop appraisal route.", "replies": [], "depth": 2}], "depth": 1}, {"id": "drlqi3i", "text": "there are a couple standard software programs used for commercial appraisal, most have a boiler plate that is fill in the blank and with a direct link to a spread sheet for the fill in the numbers. \nas an appraiser, a commercial property is usually a money generating building so we find other properties in size and income to compare them. \nwe love to find the mirror image of the subject property but rarely do so we have to go outside those lines and use whats best.\nyou can ballpark your income, age, size, location and get a fairly close idea what its worth. good luck", "replies": [{"id": "drmf7ah", "text": "That's what I thought. I can figure out a rough estimate as I know how much the building throws off in NOI and throw in a conservative cap rate. But still....can't leave money on the table. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "drls9le", "text": "If you're wonder what the property is worth because you're selling an appraisal won't be what you need. An appraisal is general a tool a bank uses to protect themselves from an inflated price. If you're considering selling a good agent will be able to tell you a likely price the property will for. Once the broker goes out and secures a buyer the buyer will usually use leverage and the lender will engage an appraiser at that point. Most brokers (at least here in TX) will be happy to put together a proposal for free which will go over what they think it'll sell for, a marketing plan, etc. in an effort to secure a listing. Full disclosure: I'm a broker, but yes absolutely use a broker. Otherwise you'll either never sell the building or leave far more money on the table than a broker fee would be. Regarding selling to your tenant: if your tenant has interest in purchasing the property the same process should be followed: solicit a broker (or two) to put together a proposal, select a broker, the broker will market the property, and the tenant can make an offer just like anyone else. Competition with the open market will do nothing but help you. Regarding dealing with the broker: everything is negotiable, but keep in mind you're hiring someone to work on your behalf and good brokers won't work with cheap owners or owners who are hard to get along with. It's much better to pay 6% to a great broker than 3% to a bad broker. Talk to a couple brokers and decide on the one who you think will be the best for you then negotiate fee if you feel it's necessary (you may agree on the front end and no negotiation is necessary). ", "replies": [{"id": "ds62dj6", "text": "This is spot on. I know I\u2019m late, but I am a broker and specifically sell land and income producing properties. You do not need an appraiser, and if you call any respectable firm the broker who wants to list your property will provide you with what he thinks is fair market price. If you have access to Costar you can run comps yourself and get a rough idea but you should just approach a broker and have them take care of it for you. Even if you already have a tenant looking at purchasing the property I would still pursue a broker purely due to the knowledge and experience they bring. Good luck!", "replies": [], "depth": 2}], "depth": 1}, {"id": "drm50de", "text": "Agents don't know anything about commercial real estate usually only enough to make them a commission make sure you are using a broker not an agent.  That value range for a commercial property seems very low what is size of property?", "replies": [{"id": "drmbp4s", "text": "I hope you're referring to residential brokers.  If you mean commercial brokers then I'd like to play this game with you. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "drm9lc3", "text": "In guessing this site has had an existing tenant for a long time and is super suburban or rural.  On the condition that it's rented  for the right price (I.e. joes mechanic shop is there and nobody aint going anywhere) If was a property in a major city, there'd be little doubt as to the price of the property because people would be actively pursuing you to sell.\n\nIf that's the case. And you have a tenant in place. Here's the calculation. \n\nGo to Google and type in mortgage calculator. \nSee \"what can I afford\" and type customers existing rent in the payment amount. Put the interest rate at 5%, take down that final borrowing number by about 7% to cover his down payment etc. \n\nIt's not gospel. But it should give you a very very very rough idea on pricingm go armed with that number and negotiate a sale to the existing tenant. . if he's at 50% of that number, you'll know whether to reach out to a real estate broker or not. \nIf it's the kind of site I imagine it is. It may take a while to sell through the open market. \n\nP.s.  this is a subreddit for professionals. Any appraiser would have my head for this. Because it's not \"good\" advise. But it will put you in the ball park.", "replies": [], "depth": 1}, {"id": "drmm77s", "text": "Where is the property located?", "replies": [], "depth": 1}, {"id": "drpy8dh", "text": "There\u2019s not one best way to get the value of the property because at the end of the day you will only get what people are willing to pay. This comes down to a few factors: what is the cash flow, projected cash flow or potential cash flow? Is it single tenant or multi tenant? Are there comps to go off of?\n\nAll investors have different appetites of risk and interest in asset classes. If the property is more than ~$5M then you are best off hiring a tried and proven capital markets broker", "replies": [], "depth": 1}, {"id": "dsddqoa", "text": "Call a broker (like me) and request a Broker Opinion of Value.  They'll provide you a BOV containing valuation information and different comps.  And it'll be free as they'll want your business and will get a commission from you later.", "replies": [], "depth": 1}, {"id": "dunxunc", "text": "Hi, wondering if you got an answer to your question? Are you still looking to sell your building? I'm a commercial real estate sale associate at a company in Downtown Los Angeles. DM me, I can give you a free BOV (broker opinion of value) Cheers!", "replies": [], "depth": 1}]