Why Valuation is Important to Family Businesses

Business valuation may seem like something only large businesses require, but understanding what this critical step means to your family business will help you better recognize the value of business valuation services. Business valuation is an essential component to an overall business strategy particularly in terms of estate and/or business succession planning. Many times, a family business is a portfolio’s largest asset; at some point in your business succession or estate planning, you will need to identify the taxable value of the business because this will help you determine your next steps. An incorrect or under/over-estimated value could mean a failure of your estate or business succession planning as this could result in missed out tax savings and/or a waste of resources in unnecessary business moves. The same is true with commercial real estate appraisal, which also forms an important part of business valuation.

Your family business may need business valuation services when determining capital gain, transferring business under a buy-sell agreement, transferring business through interest by gift, selling the business to a family member or an outsider, and determining active market-to-set price. Business value could be determined through various valuation approaches namely income approach, asset approach, and market approach. In income approach, the value of the business is mainly based on its expected income generation. When asset approach is used, value is determined according to business assets. Market approach on the other hand, determines value on the basis of similar businesses or on past sales of shares. 

Business valuation services provide business owners with crucial facts and figures on the actual value or worth of the company. In addition to its use in business succession and estate planning, valuation can also be used to determine and display company growth as you get a better view of your company’s assets as well as its overall performance. Putting these concepts into visible figures—such as in a commercial real estate appraisal—makes it easier to assess the value of a business along with its assets and to determine whether or not they are worth reinvesting in. Obtaining actual and true company value will also help you make critical business decisions and gauge your growth over the course of a particular period. This will help you make potential buyers see (in case of a sale) that your company sees regular and consistent growth, even as it ages. Business valuation services are also useful during acquisitions and mergers so as to determine the company’s real value and potential to grow.

Do you need business valuation experts? Contact RD Clifford Associates at (201) 802-0010. We provide these services to clients in New Jersey, New York, and Pennsylvania.

Things To Do Before You Invest In New York City Real Estate

 The buzz in New York’s real estate is high. This famous city in America and the world presents rich opportunities for real estate investment. US Central Bureau’s American Community Survey presented by the National Multifamily Housing Council says that 45% of housing in New York City is given out on rent which is the highest among other cities in the U.S.  To purchase real estate in New York is a costly affair which is testified by Savills Research which it reports shows New York City as one of the most expensive residential real estate markets apart from being the most expensive city in the world to rent a place.

Before you decide to put your money into New York’s land it is worth considering a few factors to ensure you’ve made a wise choice the most expensive city in the world to rent and one of the most expensive residential real estate markets

The Vicinity Counts

Uptown neighborhoods in New York attract foreigners to invest like bee to a honeypot, especially those who want to rent out their properties. The prestige associated with Times Square, Fifth Avenue, Central Park, and Wall Street is tempting enough not to want a scrutiny of the neighborhood before buying property there. The weakness in this overconfident thinking is that having an apartment in Time Square or any other famous neighborhood does not necessarily mean tenants would desire it. Tenants are also looking keenly at convenient facilities around the neighborhood. For example, is the estate close to the subway?Is the grocery store located nearby?So instead of focusing solely on a "hip" neighborhood, know what's in walking distance, because that will matter to the discerning tenants. Real estate companies in New York would dish out the same advice.

Credibility of the Developer is important

You may decide to invest in a condo or a co-op in New York. In any of the cases research becomes an important tool in your final decision to buy the property. In the case of a condo, discover the track record of the real estate company in New York, his past products, how they’ve performed. You could work solo or with a broker. If you're purchasing a co-op, find out about the cooperative board and acquire a good understanding of any future plans. For instance it they are planning to disallow pets or renovate the building which would require you to pay a large monthly assessment, you may change your decision to live in that building.

Understand the investment purpose

Investing in real estate is a subjective act. So your "best price" may not necessarily mean the best deal. It relates to the purpose behind the purchase. Ultra-net worth individuals may be buying $20 million+ condos as pied-à-terres to be whenever they are in the city. The idea to buy the real estate is to hedge bets against the marketplace. Within the next 3-5 years, they're hoping the condo will be worth 1.5x more than what they purchased it for. Most investors, however, are buying condos and apartments to rent out and turn a profit, which has a vastly different price point. If the investment is to gain a rent, the price goes upto $3.5 million, for a 2-bedroom or a 1-bedroom. A cheap price will fetch you a cheap rent, and a higher price point will earn higher rent.

Experience the property

A real estate appraiser knows that an intended purchase usually precedes a scrutiny of the location for most buyers. And so he values the properly fairly after doing his own assessment. Buyers or their trusted brokers must personally visit the apartment. Nose around the locality, check out the apartment for any downsides etc. With technology one does not necessarily have to visit the apartment personally if they located overseas. They can trust their broker enough and view the apartment on Skype or FaceTime, coming down only for the final closure.

Top Tips for investing in New York property

•  The more established an area, the safer choice to invest in today’s market say real estate appraisers
• Invest in areas where New Yorkers want to live, and there is a lack of competition from rental properties.
• The more the number of rooms the higher is the rent of the premise. The size of the room does not determine the rent as much as the number of rooms
• Properties in lower income areas tend to have more maintenance issues as well as higher turnover.

Contact RD Clifford Associates for real estate appraisals

RD Clifford Associates, Inc. has been providing quality full-service valuation and real estate appraisal services to multi-industry clients and cross-disciplines in New Jersey, New York, and Pennsylvania.With over 20 years of experience in providing real estate appraisal services and other valuation services, these real estate appraisers truly value client relationships and believe that personalized service is essential.

The Importance of Scheduling a Real Estate Appraisal

What is a real estate appraisal?

The process of forming an opinion of value on a real estate is called an appraisal. An appraisal is conducted in a systematic manner by an independent appraiser to determine the market value of a property. A real estate appraisal is also commonly referred to as a “property valuation”.

When would you need an appraisal?

A real estate appraisal service is needed whenever a person is financing the purchase of a property, or when an owner is looking to refinance. Someone might also have an appraisal done before listing their property for sale in order to determine a fair listing price. Appraisals are commonly required during estate sales and divorces, and they can also be used to determine tax liabilities.

Who conducts an appraisal?

Most states mandate that appraisers should be licensed or certified. If a commercial real estate appraisal or a residential real estate appraisal is required as a condition of your loan (whether you’re purchasing or refinancing), the bank will initiate, hire, and oversee the appraisal. New regulations do not allow Fannie Mae and Freddie Mac lenders to be directly in contact with appraisers so most banks will initiate the appraisal through an appraisal management company that has a number of appraisers from which to draw. If the appraisal is for your home before you sell it, hire the appraiser directly.

What is the function of the Appraiser?

An appraiser’s job is to determine the current value of a property. He will provide an objective, impartial and unbiased opinions about the value of the real property, providing assistance to those who own, manage, sell, invest in and/or lend money on the security of real estate.He will walk the length of the property to determine its exterior condition. Evaluate any amenities such as a swimming pool, finished basement, or built-in bar.The real estate appraisal service during appraisal takes into account the age, condition, size, location and overall amenities before ascribing a value to the property. The appraiser will then compare the home being appraised to comparable homes that have recently sold in the area. Positive or negative adjustments are made for any dissimilarities and a reconciled value is determined.  

Schedule a real estate appraisal

A team of real estate appraisers from RD Clifford Associates is providing credible and timely commercial and residential reports for real estate valuation of commercial and residential properties at a competitive price in New Jersey. They are equipped to efficiently handle any kind of real estate appraisal having acquired colossal and wide-ranging experience in the market over the years. Multi-industry clients and cross disciplines have benefited from their professional services in New Jersey. Apart from New Jersey we also conduct commercial real estate appraisals in New York and Pennsylvania. Driven by high standards, made possible by their stickiness to employ only the best real estate appraisers in NJ they deliver experience and integrity to their customers’ projects.

What to Expect During a Real Estate Appraisal

Selling a home involves a lot of pre-sale activity where a residential real estate appraiser plays an important role. The appraiser’s job is to determine the fair market value of your house based on proper research on the selling prices of homes in your neighborhood and on a visual inspection of your house and property. So here are a couple of things the appraiser will do in the residential real estate appraisal – he will inspect thoroughly. Check the plumbing, determine the number of rooms, look inside them to see their condition and even take pictures of all the rooms. In case of any leakages, or pooled water on the kitchen floor near the washer, he will question you about their origin. He will seek to find if any new fittings have been put in places like a new shower or new windows because this freshness will hike up the selling price of your home, and he needs to take that into consideration. His appraisal also covers the outside of the home. So he will measure the entire house from the outside, as well as your entire property taking pictures of every side of the house. If your home offers a view of scenic beauty like the Manhattan skyline he will immediately seize this fact and raise the value of your home. Or if you have installed a new roof or siding. It works the other way as well, so, if your home overlooks something unappealing, this will reduce the value of your home.

Before the real estate appraiser comes knocking on your door for a residential real estate appraisal check out any areas that may require maintenance and which on repairing could jack up the price of your home. Leaking floors, loose floorboards, choke gutters can all run down the selling price if you keep them that way and attempt to sell. Telling the appraiser that you plan to fix them later will not help the value. He or she has to base the appraisal on the condition of the house at the time of the appraisal.Also ensure your home is embedded with safety equipment which could be smoke alarms, carbon monoxide alarms, and home security alarms, among other things. All this gear must be in sound working condition if you wish to impress upon the appraiser the good upkeep of your home. This principle of safety works well in the case of a commercial property appraisal as well.

Often residential real estate appraisers are hired by banks to determine the fair market value of the selling property to help them make a decision about how much to lend to the home buyer. Banks must follow particular loan-to-value ratios when issuing mortgages. An appraisal can take a day to several days to finish. Once it is done, the bank will provide you with a copy of the appraisal telling you the fair market value of your house.If you've done your homework before pricing your home, the fair market value should be very similar to the selling price.

Commercial real estate appraisals are more subjective in nature than residential real estate appraisals as much of the value derived from a commercial building is based on the rental rates received relative to the expenses paid out. The underlying asset is important, but not even close to the same way that a residential property values assets. Some things need to be kept in mind if you are going in for a commercial real estate appraisal because you are selling or buying the piece of property or if you want to establish a value of a lease or lodge a property tax appeal.  For one, inspection is only a small part of the commercial real estate appraisal process. Appraisers have to research public ownership and zoning records, investigate demographic and lifestyle information, and compile comparable sales, replacement costs, and rentals. They then analyze this information as it relates to the value of the property. Finally, they write a report on their findings. Do not withhold any information from the Appraiser who has no interest in unduly expanding his work files but needs certain information to quickly complete the assignment. You will probably be asked if you can provide a property tax bill, a set of drawings of the property, income statements, and other things. If an appraiser refuses to do something that you ask for, it is probably because of the obligation to adhere to the Uniform Standards of Professional Appraisal Practice, which, among other things, requires them to provide an unbiased opinion. Also, the client is the party that orders the appraisal so if the appraisal is for financing, the lender is the client. Appraisers are obligated to maintain client confidentiality, so if you are the borrower or any other party, the appraiser cannot release the appraisal report or any other confidential information to you. Similarly, if you order an appraisal as part of a property tax appeal and are afraid that the appraised value might be higher than the assessed value, you can rest assured that the appraiser won't release the results to the property tax board without your permission.

RD Clifford Associates, Inc. has been providing quality full-service valuation and real estate appraisal services to multi-industry clients and cross-disciplines in New Jersey, New York, and Pennsylvania.

Useful Tips To Get The Most Value Out Of Your Home Appraisal

Home appraisals provide you with a realistic value of how much your property is worth. It also provides useful information about your home to a potential lender or a bank. There are a number of factors that influence a real estate appraisal such as the age of the property, the neighborhood, future marketability, current selling prices of similar homes, etc.

So, if you are looking for either refinancing or selling, here are a few things to consider so that you get the most out of your home appraisal:

Showcase your home well

The very first step is to make your home look good! Cleaning and tidying up could make a better first impression on the mind of the appraiser. A quick glance around your house gives an experienced appraiser a fair idea of what to expect. So, make sure to showcase your home well and get rid of all the clutter to create a good initial impact.

Point out the distinguishing characteristics

Point out what is special about your home such as landscaping, new flooring or proximity to some famous landmark. All these factors are considered by a real estate appraisal company while evaluating your home.

Provide your own comparables

It’s a good idea to voluntarily provide some recent sale comparables that are in the same value range that you are looking for. The appraiser may or may not use them, but make sure that you provide sales data for a few well-priced comparable properties.

Understand what adds the most value to your appraisal

Lastly, make sure that you understand the various factors that affect the value of an appraisal. If you have made major renovations or minor changes to your home, make sure that you mention it to the appraiser. You can even provide before and after photographs if you have them.

Most real estate appraisal companies have a set of guidelines to follow and work with a checklist. All you need to do is to make sure that you put your best foot forward and provide the valuer with all the relevant information that could potentially add to the value of your home.