Assessed Value vs. Market Value
Have you ever wondered why the assessed value and market value of a house are different?
Let me answer this and break it down for you.
The assessed value is the dollar value assigned to a property by the local tax assessor’s office. This value is used to measure and determine applicable taxes. The higher your home’s assessed value, the more you’ll pay in taxes.
While the assessed value can help you determine what you may end up paying in annual property taxes, it’s not useful when it comes to determining the value of your house and what a buyer might be willing to pay for it. In fact, the assessed value is typically lower than fair market value - sometimes significantly lower. The assessed value is also typically immune to major fluctuations in the real estate market.
The market value is the price of a home based on current market conditions. When it comes to real estate, this is often the agreed upon price between a buyer and seller under usual and ordinary circumstances. Sellers often determine the market value of their house based on recent comparable sales in the same neighborhood, coupled with the forces of supply and demand.
With this said, a home’s market value can rise and fall abruptly based on local conditions.
Price it right
If you’re looking to sell your house and wondering how to price it based on the market value, it’s a good idea to meet with a realtor so you can better understand what your house is truly worth.