The Difference Between Commercial Appraisals & Residential Appraisals in Miami
If you’re looking into an appraisal in Miami, one of the first questions you might have is: What’s the difference between a commercial appraisal and a residential appraisal? The truth is, both are designed to answer the same big question—what is the property worth?—but the process, level of detail, and cost can be very different.
Since I work with both residential and commercial assignments here in Miami, I’ll break down the differences in a way that makes sense—and give you an example of how a commercial appraisal plays out compared to a residential one.
Residential Appraisals in Miami
Residential appraisals are what most people are familiar with. They typically involve single-family homes, condos, or small multi-family properties with two to four units.
The most common type of report for lender work is the 1004 URAR (Uniform Residential Appraisal Report). This form is required for federally regulated mortgage transactions and includes specific language, certifications, and disclaimers to satisfy banking regulations.
For private assignments—such as divorce, estate, tax appeal, or pre-listing appraisals—reports are usually completed on General Purpose Appraisal Report (GPAR) forms. These look similar in format and analysis to the URAR, but they do not contain the federally mandated language required for lending transactions. That makes them better suited for attorneys, CPAs, homeowners, and other non-lender clients who simply need a credible and supported opinion of value.
A residential appraisal in Miami typically includes a property inspection, comparable sales analysis, a neighborhood review, and final conclusions presented either in URAR forms for lending or GPAR forms for private work.
For example, if I’m appraising a 3,000 sq. ft. home in Pinecrest, I’m likely comparing it to similar closed sales nearby and making adjustments for things like lot size, condition, and pools. The emphasis is heavily on the sales comparison approach because buyers and sellers of homes in Miami are primarily driven by what similar homes are selling for.
Typical fees for residential appraisals in Miami range from $300 to $700 for standard homes, and from $700 to $5,000 or more for larger, luxury, or waterfront properties.
Commercial Appraisals in Miami
Commercial appraisals are very different. They cover properties like apartment buildings with more than four units, retail centers, warehouses, office buildings, and mixed-use developments. Instead of using the 1004 form, commercial appraisals are written as narrative reports, which are far more detailed.
Here’s what sets them apart:
Commercial appraisals almost always include the income approach, along with sales comparison and, at times, the cost approach.
Highest and Best Use is a critical factor, especially in Miami, where zoning and redevelopment potential can make a property more valuable than its current use.
Market data is often harder to come by, since there are fewer commercial sales and each deal is unique. Appraisers rely on CoStar, LoopNet, county records, and direct broker interviews.
Reports are much longer—often 50 to 100 pages—because they need to explain leases, zoning, market risks, and future projections in detail.
Let’s take Wynwood as an example. If I’m appraising a retail property there, I’m not just looking at what similar buildings have sold for. I’m analyzing rental income, tenant quality, vacancy rates, and what investors are paying per square foot in competing areas like Midtown or the Design District.
Wynwood remains attractive because of its cultural and artistic identity, but the market is currently showing signs of cooling. Prices have pulled back, inventory is up, and buyers are more selective. For an investor, that shifts the narrative from “red-hot” to “worthwhile—if priced right.” That’s exactly the type of nuance a commercial appraisal needs to capture.
Fees for commercial appraisals in Miami typically start around $1,500 and can easily range from $5,000 to $10,000+ depending on the property size, complexity, and scope.
Key Differences Between Residential and Commercial Appraisals
Purpose and Users
Residential: Primarily for mortgages, estates, divorces, or private valuations.
Commercial: Commonly used for financing, investment analysis, development, litigation, or tax appeals.
Report Type
Residential: Uses standardized forms like the 1004 (lending) and GPAR (private).
Commercial: Written as custom narrative reports tailored to the property and client.
Valuation Methods
Residential: Focuses on the sales comparison approach; may include cost or income approaches where applicable.
Commercial: Centers around the income approach, supported by sales and cost data—because investors are driven by cash flow and ROI.
Complexity
Residential: Relies on comparable sales and property condition.
Commercial: Involves zoning, leases, rent rolls, development potential, and market forecasts.
Time and Cost
Residential: Shorter, less expensive, and quicker turnaround.
Commercial: More time-intensive, research-heavy, and costlier.
Final Thoughts
If you’re in Miami and need an appraisal, knowing whether your property falls under residential or commercial makes a huge difference in terms of process, timeline, and cost.
A home in Kendall will be appraised much differently—and for far less—than a retail strip in Wynwood.
Residential appraisals lean on comparable sales and market reactions. Commercial appraisals dive deeper into income potential, zoning, and redevelopment possibilities.
Both serve critical roles in protecting your financial interests, whether you're buying, selling, refinancing, investing, or planning your estate.
If you're unsure which type of appraisal you need—or what’s involved for your specific property—feel free to reach out. The right appraisal not only gives you a supported value, but also insight into how your property fits into today's Miami real estate market.