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The 5 Values of Every Home
I've always enjoyed this illustration showing how a home's value is perceived depending on the different perspectives of value. I saw a similar meme today on Facebook with the seller saying $400K and a cat saying $150K! Remember, when selling, it only matters what the seller and buyer (and later the appraiser) all agree on with value.
Every home has 5 different values. Assessed Value, Appraised Value (Insurance & bank), Market Value & Owner Value. These values are separate entities and can often be mistaken for one or another.
1. Assessed value is for tax purposes and is re-active. In other words, sales have to happen first and regardless of what happens after the assessed date.. the value remains the same for one full year.
There are two types of Appraised value, one for insurance purposes & one for lenders. For insurance purposes you want to make sure the appraised value at least covers the cost to rebuild your home. For lending purposes.. the appraised value always comes lower based on the lenders loan to value ratio.
Market value is what your home is worth at any given time. Market value is fluid, it can go up and go down on ... more
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