Property values change drastically depending upon the type of valuation conducted; know how the difference between an appraisal and an assessment of your property will affect you.
Property assessments and property appraisals both refer to the determination of a property’s value. However, a property appraisal differs significantly from a property assessment. Ultimately, property assessments are conducted by Arkansas municipalities for the purpose of levying taxes on the said property while property appraisals are routinely used when selling or purchasing a home.
Before you hire a licensed appraiser or find yourself dealing with an overbearing county or state tax assessor, you need to understand the key difference between an appraisal and an assessment for your property.
Property Assessment
In order for the State of Arkansas or a municipality to collect taxes on a certain property, a tax assessor must assign a specific value to your property. In most cases, the tax assessor may not maintain any type of professional appraisal license, and he may not consider factors pertaining to the current condition of your home. Most importantly, the property assessment does not reflect the actual market value of your property.
Problems with Property Assessments
There are some key drawbacks found in property assessments, and they include the following:
- Most tax property assessments are conducted in set intervals of 10 years; however, some governments may have shorter or longer assessment intervals.
- The out-of-date property assessments may be under- or over-valued.
- Property assessments do not take important, hidden problems into the consideration of a property’s value, as the assessor does not view the interior or structures.
Property Appraisal
If you need a detailed valuation of your commercial or residential property value, then you need a property appraisal. A property appraisal can only be conducted by a certified or licensed appraiser in Arkansas, and you need to ensure the firm handling the property appraisal has worked with similar appraisals in the past.
During the appraisal, the appraiser will collect information regarding the foundation, utility service, structure, damage, and every possible minute aspect of the home or business. Furthermore, an appraisal gives your property a value based on its size, location, and recent sales of similar properties. Both the sellers and buyers of property routinely request a property appraisal to ensure the pricing of the property is appropriate.
The Purchase and Sale of Property
Most property sellers use a property appraisal to determine the best price for listing the commercial or residential property on the market. This gives property owners a reasonable expectation of how much money the property will bring in, given its current condition. Although property appraisals are routinely used during the selling or purchasing of property, they also have another key purpose.
Property Appraisals for Assessment Corrections
When the assessed value on a property through property assessment exceeds its actual value due to hidden issues, such as foundation or other structural problems, a property appraisal can be used to prove to the local Arkansas tax office how the given issues adversely affect the property value.
If your current property assessment does not coincide with problems or improvements to your property, contact Ferstl Valuation Services today by calling (501)313.0641 . The principals of Ferstl Valuation Services are experienced, licensed attorneys by the Arkansas State Bar, and we understand how the difference between an appraisal and an assessment influences the value of your property.
