Charles - many times I advise a seller to have a listing appraisal done just to firm up their expectations.  Sometimes when they hear it from someone other than the Realtor they tend to believe it.  Plus it lets them know the figures that a lender will most likely see.  Sometimes it's tough to get folks to understand that the emotional value they place on a property is far different from the market value.  A pre-list appraisal sometimes helps with this.

CAROL - Agreed, I know this is not a propular subject regarding Real Estate prices but when a seller is not seeing action on a home, it helps to get a precise appraisal.

Charles, Another advantage to a pre-listing appraisal is to print out a copy with color pictures and have it next to the sign in-sheet at the listed property. This gives other Realtors, as well as prospective buyers, more confidence that the list price is a reflection of the current market. 

In our area, the assessment is nearly always lower than the market value.  I tell people to just go on down to the court house and complain about it.  Tell them you want higher taxes!  Funny I've never had one do it!!

Charles, Thank goodness that our area assess property values lower than the appraised values. At least I get to keep some of my money instead of it all going to the tax collectors.  8-}

This is well said Charles...so many people get confused between the 2 terms

DAVID - excellent idea and point!

BARBARA - LOL! We are the opposite.

MICHAEL - that is a good thing

BLR - I think a lot of the public does.

Excellent ! I feel like I am explaining the difference more times than I am willing to count ! Love that picture by the way !

Many consumers think that the assessed value of a home is the value of the home.  Springfield's assessed value is much lower than the true value.  I can't wait to see if the assessed value of homes in the next few years go down, coinciding with the market.

MELISSA - Seems there is some confussion....

KAY - We are getting a re-assessment soon and it will be interesting...

i like to use the analogy of a real Estates valuation as representing the cars headlights and what it illuminates out front. That is with the market what it will sell for. The appraisal, on the other hand is more of a historical relationship to value. For example in our market today the market actually turned last July . So an appraiser could use closing numbers from September that reflect the market pre-turn. Whereas the agent will look more to pending (in this issue)to reflect the turn and current values... price vs value...not always the same. But a confusing issue to the client...especially when the county has another set of numbers.

PERRIN - I agree with you somewhat.... A good appraisal can actually give a price in the future not past value. Maybe an estimated value in 30, 60 or 90 days. Even a year from now.

As an example most relo companies will rely on an appraisal and will price it to sell with in a future timeline.

I beleive this is what you are doing with your CMA, pricing to sell now or in the future.

Charles - I see this mistake all the time in Real Estate. Assessment and appraised value are rarely the same. I actually did a post on this about a month or so ago. I find it funny when you say agents making qotes in their listings that say something like "priced below assessed value". My immediate thought is who cares! There are plenty of homes priced below assessment. All that means is you are paying more in taxes than you should be!

Charles,

This is a (kinda funny) reversal of the agent's opinion of value versus the Assessed value situation.

We had a rather arrogant broker recently place his house on the market for a VERY exaggerated price. His "assessed value" was 3 million dollars below his listed  "asking price".

Someone sent a copy of his MLS Listing to the tax collector and requested that they re-evaluate his property since, he being a Broker and someone who should know real estate values, he should be paying his fair share of the property taxes based on his opinion of value.

At tax renewal time his taxes went up over $25,000. His home has been on the market now for over 3 years, but now at a reduced price.

Maybe he should have gotten an appraisal.

Don

BILL - EXCELLENT POINT about adding it in the MLS!!!! LOL

DON - YOU ARE KIDDING!!! THAT IS SO FUNNY AND WORTH A POST!!!! IMO

Charles this is some excellent information here! Many people may not understand the differences and they do need to know them. I also appreciate the fact that you went ahead and let it be known that we are not appraisers. While we can tell people what market trends dictate, the appraiser gives the most accurate information.

STEPHEN - Like I said it may not be a popular subject but it is the facts.

Charles - great reminder that they are not the same figures!

B and B - And the public, a lot of times, does not realize this....

Charles -Market Value Assessments - Current Market Assessment - call it what they will they are misleading the public by implying that the assessed value has any relationship at all to a properties true market value. The assessed value is just the assessed value nothing more nothing less.

It is a value put on your property at a given time (historical never current) by the assessors to allow the taxing body to divide the amount of money they require in a somewhat fairly accountable manner amongst those who have to ante up.

It's great that you took the time to help educate the general public to his issue

KATHY - thanks I think this is an important piece of information!

Appraisal is not always a perfect valuation either.  Depending on what the appraisal is for, it can vary the price they come up with. 

For example VA appraisers use different criteria that for conventional loans.  When the market was hot the VA appraisals were consistently below market value.  The other thing I find is when the home is sold below value the appraisal generally comes in at the amount needed for the loan approval not the full value.

RANDY - That is an excellent point(s)... A appraisal for a loan is often right at the price... Interesting...