What formulas do appraisers in Arkansas use?

[Jennifer Schelkopf]

I'm reading David Greene's BRRRR book, and he notes:

First off, it’s important to recognize that appraisers in different areas use different formulas to determine the values of single-family homes. They are all still comparing them to other single-family houses, but they give weight differently depending on certain aspects of a home. For example, a California-based appraiser is much more likely to give more weight to the proximity and condition of a home than to the square feet of the home. In other areas, like the South, appraisers are more likely to use the price per square foot of a home than the condition it’s in. Understanding

Greene, David M. Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple (p. 60). BiggerPockets Publishing. Kindle Edition.

What is the biggest component to appraisals in Arkansas? Have you found that appraisers start with the price per square foot and adjust from there, as Mr. Greene suggests? Does it vary for different areas, such as Little Rock, Hot Springs, or Northwest Arkansas?

[Ryan Blackstone]

I am in Northwest Arkansas and we typically see or follow these rules. Mind you, each appraisal is different. 

1. Location- Needs to be closer than 3-5 miles out. (if you can stay in the same Neighborhood, then great. 

2. Time- FHA I think does 90 day. We (my team of real estate agent and I) us 365 days out.

3. Age of house: Here are our cut offs. Age: my different cut offs are 1978, 1999, 2007, 2018

4. Sqft: typically good to be no more than 20% difference.

5. Condition- I categorize 1-5 

They will give $$$ valuations if they are missing something. For example, if you are missing a garage stall, they will deduct $5,000 to make it similar. They typically wont go more than 5% above appraised value unless they have a great explanation. However, again the real price is what a buyer is willing to pay and what a seller is willing to sell. And each appraiser has their own way and is way more subjective than I would like. Valuing a property is hybrid of Art form and Science. We go by these rules of thumb, but aren't held to them. We try no less than 3 comps and no more than 5.