DEFINITION OF AN APPRAISAL: The act or process of developing an opinion of value of an asset (real estate).
DEFINITION OF MARKET VALUE: Market Value is defined as follows: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what they consider their own best interest; (3) a reasonable time is allowed for exposure in the market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. (Source: OTS/FDIC/NCUA/FED/OCC/FHLMC/FNMA)
COST, PRICE, AND VALUE: Relating to real estate, it is possible that two or three of these numbers could be the same, but normally are not. These are three completely different concepts.
SALES COMPARISON APPROACH: An estimate or opinion of value is derived by comparing the property under an appraisal with other bench mark properties with some degree of similar utility, size, location and quality which have sold within a reasonably recent time period.
Call Overstreet Appraisal Service 501-268-1680, or contact us online, and we will answer any questions and walk you through the process to get an appraisal completed for you.
