Toward an Assessment of the Reliability of Commercial Appraisals

Appraisal Journal, pp. 422-432, July 1986

Posted: 20 Mar 2008


The appraisal of a major commercial property is a complex and challenging task. Typically, a client requests an opinion of market value, often with his or her own unique definition of value. Although definitions vary and "a current definition of market value" cited in the Appraisal Institute's principal text is quite distinguishable from a "most probable selling price, most practitioners are comforted when arms-length transactions between astute buyers and sellers take place at prices close to appraised market value.

This article examines a series of sales of commercial properties that had been recently appraised in an effort to assess the reliability of commercial appraisals. While there can be no perfect test of an opinion, we believe that the data are informative. On average, the absolute difference in sales price and most recent independent appraisal was almost 9%.

Keywords: appraisal, commercial real estate, pension funds

JEL Classification: G12, G23, G31

Suggested Citation

Cole, Rebel A., Toward an Assessment of the Reliability of Commercial Appraisals. Available at SSRN:

Rebel A. Cole (Contact Author)

Florida Atlantic University ( email )

College of Business
777 Glades Road
Boca Raton, FL 33431
United States
1-561-297-4969 (Phone)


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