The appraisal is one of the most crucial elements in a loan closing. They truly can make or break a deal. This is why having a well qualified hotel appraiser assessing the value of the hotel your are purchasing or refinancing is extremely important. The bank’s we work with have been in existence for quite some time and have built up a long list of highly reputable hotel appraisers on their bank approved appraiser list. They use very experienced hotel appraisers on all of our deals, which is critical to getting an accurate and true valuation of your hotel property and most importantly closing your deal without problems.

Comparatively, some local banks, our competitors and banks that are not as experienced as us in SBA hotel lending will often hire appraisers that are inexperienced in appraising hotel properties but are very experienced in appraising commercial investment properties such as apartment complexes or shopping malls or the like. This is a very huge issue as a hotel appraisal is a very specialized appraisal because of the approach to value that should be used is much different for a hotel.

If the value of the property is too low because the appraiser did not appraise the property in the right way then the borrower will ultimately suffer. The borrower would have to increase their down payment to make up for the difference of the amount that the property appraised for and the purchase price. However, usually what really happens is the deal just falls apart because the borrower does not want to increase their down payment, especially because of a bad appraisal. The borrower is then at a loss of all the money that they would have spent up to that point on getting the loan. This includes the cost of the appraisal and other third party reports (i.e. environmental report, sometimes a survey) and other new business expenses (i.e forming a new corporation, title fees, etc). This is a shame and we refuse to allow our clients to ever have this happen to them. Our clients can rest assured that their appraisal will be done by a very seasoned and highly specialized hotel appraiser every time.

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