Frequently Asked Questions...
Why do you need an appraisal specialist?
- Petroleum properties have unique characteristics and appraisal requirements.
- Most traditional appraisal techniques are simply not useful.
- Institutional training on this property type is virtually non-existent
Retail petroleum facilities are typically going concerns. Federal appraisal standards (FIRREA, USPAP) require segregation of real estate, equipment
and business component values so lenders can make a reasonable risk assessment of the collateral. In the marketplace the prices paid for these properties is a function of the profitability of the business, but many appraisers base their value estimates on traditional real estate methodology and fail to consider the profitability factor. As a result, frequently these appraisers fail to accurately estimate value and adequately segregate the components of value as required by regulation.
How does PetroVal estimate value?
PetroVal recognizes that a retail petroleum property is a business and not simply commercial real estate. Our analysis begins with a valuation of the entire business enterprise based on current and potential retail sales and profitability factors.
Then the contributing value of real estate and equipment is segregated and supported with market data. This type of analysis is not possible without detailed financial information concerning comparable sale properties and detailed knowledge of the industry.
Will a specialist cost more?
No, not necessarily. As specialists we work more efficiently in our niche, while providing our clients a superior quality service. We know the right questions going in to the assignment and provide the borrower with an efficient appraisal questionnaire.
Dispensing premium services at regular prices is our goal. You can always find a cheaper product or service, but the consequences of an unreliable valuation are:
A) Transaction lost because the value is well below market, or
B) Contributes to a problem loan.