What is an MAI assessment?

MAI valuations are among the most sought after valuations in the commercial real estate world. MAI stands for Member of the Appraisal Institute, an industry association that monitors appraisers and keeps them to a higher standard than appraisers who are only licensed and do not belong to such an organization. There are other industry organizations that are active in the real estate world. MAI is, however, the most famous, and thus the most popular.

Technically, there is no such thing as an “MAI assessment”. There are only assessments made by an appraiser who has completed the MAI Appraisal Institute’s class offers and holds this designation. But it is often much easier to refer to the actual assessment as certified than to stick to technical details.

A valuer who has earned the MAI designation is qualified and has experience of constructing both residential and commercial properties. Many other valuers are only qualified for residential properties. At one point, lenders likely required an assessment to be made by an MAI-certified valuer or a member of another industry association. However, this has been illegal since 1989, as there is no federal regulation of these organizations. Still, certified valuations can increase the chances of a favorable loan situation, as the lender will feel more comfortable. An MAI-certified valuation offers lenders a reliability that allows them to be confident in their investment.

A commercial assessment by an MAI-certified valuer can contain many things. In general, it will provide an overview of the community, the neighborhood and the public area where the property is located, as well as a detailed description of the site and all the buildings it contains. Area analysis, an analysis of the highest and best use for the property and an in-depth discussion of the property’s value from several different points of view will also be included. The valuer may also make a recommendation as to which valuation is most appropriate in his or her opinion.

Valuers tend to be cautious in their estimates. However, this does not mean that you get a low valuation. An MAI-certified valuation company assumes responsibility if the valuation is too high and the property cannot be sold for the price they recommend. The company also takes responsibility if the price is too low and the property is sold for too little money. Because of this, valuers have a vested interest in ensuring that their estimates are in the intermediate range. Which sales a valuer attaches the most importance to depends on the type of market it is. In a rising market, the emphasis will be on higher recent sales, and in a falling market, the emphasis will be on lower recent sales. A good valuer is interested in giving customers as accurate an estimate as possible.

Leave a Reply 0

Your email address will not be published. Required fields are marked *