Special Guest Blog Post by Joe Kireta: Appraisal Institute of Canada

As experienced commercial brokers, we work in conjunction with appraisers on many of our deals.  Naturally, we feel it appropriate to introduce our readers to this area of the real estate business.  Today, Joe Kireta AACI with Ray Bower Appraisal Services Inc, will provide us a guest blog post on the Appraisal Institute of Canada:

When the market's changing, who can you trust? Call the real estate experts, Appraisal Institute of Canada (AIC).  We are Canada's leading authority in real property valuation. Make wiser  choices with in-depth analysis, market insights and practical solutions - from acquisition and development to management and disposal.

Founded in 1938, AIC is the premier real property valuation association in Canada. As a self-regulating professional organization, AIC grants the distinguished Accredited Appraiser Canadian Institute (AACI) and Canadian Residential Appraiser (CRA) designations to individuals across Canada and around the world.

AIC members are highly qualified valuation professionals who undertake a rigorous program of professional studies, examination and experience before being granted a designation. The Institute also supports the principles of lifelong learning through a mandatory continuing professional development program and requirements to complete our professional practice seminar on a regular basis. These ensure that members have the most up-to-date education and skills to offer their clients.

The education, experience and life long learning requirements that  AIC has put in place ensure that the real value expert you hire will provide you with the most professional valuation expertise and opinions in the marketplace. Put your trust in the most highly regarded designations in the real property marketplace.  Get real property experts working for you; consult an AIC professional.

For further information on how a real estate appraiser can be of assistance to you, you can visit the Appraisal Institute of Canada website (AIC) http://www.aicanada.ca

Thanks to Joe for his contribution today.  To find out more about his appraisal services, call 519-981-8896 or email connect@joekireta.com.

For Sellers Only – Interviewing Brokers

Commercial property sellers need to review their options - AKA, interviewing the most qualified commercial brokers in your area.  Beyond having the right credentials and background in your market, their services should include much of the following.

Check list of services:

1)      A current analysis of market conditions/trends within the area

2)      Supporting data based on price/ft. and income analysis comparisons

3)      A marketing plan which targets the property to right users/investors

4)      Aggressive promotional plans – including website marketing, signage, flyers, video tours

5)      Financing options – including both institutional, private, and VTB

6)      Negotiation strategies utilized

7)      Working arrangement with the local broker community

8)      Ability to service premises tours/viewings

9)      Transactional/contract expertise (documentation prep)

10)  References that can be reviewed and called upon

Beyond the services, a discussion of brokerage fees involved is certainly appropriate.

Typically this will be % fee structure based on the selling price of the property.  It could also be flat fee based, depending on your area and based on what you are able to negotiate. Fees will and do vary from broker to broker, even within the same area. Best advice here - is interview a few of the best qualified brokers in your area and make your selection based on your specific needs. But as a caution, remember that old saying – 'you get what you pay for' - which certainly applies in the world of commercial real estate.

All of the above, although not necessarily a complete list of services you need to consider, gives you a solid basis to interview candidates. Bottom-line - a Seller must be confident in the ability of the broker to 'GET THE JOB DONE'.

Again, seek out experienced commercial brokers within your market, to best market your property.

Zoning - Permitted Uses

In purchasing a commercial building, you need to pay particular attention to the zoning bylaw, and how it applies to your use. Often times, assumptions are made regarding the zoning on a property – perhaps it is even zoned commercial – but at some later stage, you discover the applicable zoning bylaw does not permit your specific use. After the fact this can become very problematic and often costly to correct.

Best practice here is to confirm with the local municipality, that your USE IS PERMITTED WITHIN THE APPLICABLE BYLAW. If there is any doubt, second opinions are good. Best options then are with your solicitor or officials within the municipality itself.  Municipalities will typically want any requests for a zoning confirmation (or interpretation on a use) in writing – but will likewise respond in writing, which is obviously preferred.

Other factors which you may need to consider:

i)                    Does the existing bylaw allow for a change(s) in the business?

ii)                   Are there parts of the bylaw you cannot comply with (ie. parking)?

iii)                 Is the bylaw consistent with the neighbouring district?

iv)                 Is the bylaw marketable for purposes of re-sale?

v)                  Are there any pending changes (municipally) to the bylaw?

vi)                 Costs associated with obtaining a re-zoning should it be needed?

On the final point above, this assumes that the site does not allow for the use which you propose. Bear in mind that in order to amend the zoning, you are likely looking at months, not weeks, to go through the municipal process.  This in turn adds a further ‘major condition’ to the Offer to Purchase, which obviously has implications with both the Seller and likely your negotiation strategy. If it then becomes a reality with your deal - make sure you are clear on the costs, the process, and any other municipal requirements which apply.

Again, seek out an experienced commercial broker with strong local backgrounds, to assist you in the area of zoning compliance with respect to your purchase.