Commercial Real Estate Loans > Commercial Lenders Use the Lower of Purchase Price or Appraisal

Commercial Lenders Use the Lower of Purchase Price or Appraisal

Commercial Lenders Base Their Commercial Loan on Sales Price, Not the Appraisal

Almost every day I see new commercial loan agents with commercial loan requests where they want to get 90% or 100% LTV financing because the buyer is buying the property for less than market. They are dreaming! If a seller can get $1,000,000 for his commercial property, he is NOT going to sell it for $800,000.

As far as 99.999% of all commercial lenders are concerned, the purchase price is the best indication of the fair market value of the commercial property. Your commercial loan will be based on the lower of the two - purchase price or appraisal.

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