Several times a week I will have someone ask me the difference between assessed and appraised value? Should they be the same or should one be higher or lower then the other? How does that effect me? These two words are commonly mistaken for each other and both are used frequently when relating to a homes value. As a homeowner, or soon to be owner, please make sure you understand the difference because it does effect you financially.
The assessed value of a home is the valuation placed on a property by a public tax assessor and is the basis for property taxes. If you would like to keep the property taxes low, you would want your assessed value to be as little as possible. There are many cases where the assessed value of the home is higher then what the home could actually sell for. If you find this is true, please petition the assessor for a revised evaluation to lower your taxes. The assessed value of a home is not related to the fair market value of a property.
The appraised value of the home is determined by the purpose of the appraisal. When purchasing real estate, the lender will want to make sure the amount you paid for the property is fair and current with market trends. The bank will hire an independent appraiser to protect themselves and the buyer from paying too much for the home. Buyers would typically like the appraised value to be what they offered for the home or higher. This new home purchase appraisal is related to the fair market value of the property. Buyer and seller beware however, if you have a refinance appraisal, this was not to determine fair market value. The re-finance appraisal is to determine the available amount of your new loan.
Most owners of real estate want the assessed value low and the appraised value high. It is a good financial decision to know the value of your home and if you are taxed properly. A professional real estate agent can help you with questions you have about the fair market value of your property or the taxable assessment.
Heather Morris, CRS, GRI, ABR, CLHMS
Broker Associate/ Skogman Realty 2008