Assessed or Appraised Value: What’s the difference?
By Karen Knight, Linn County LIVING WELL Magazine
Many times when people decide to sell their home, they think it will sell for its assessed value. That may be true or not true depending on many factors. The price your home sells for will be the fair market value. In this article, I am going to define the various terms and how the value of your home is determined by each of these terms.
Assessed Value: An assessment is the value placed on a property by the town or city’s assessor’s office for the purpose of determining the property tax due. The combined assessed value of all the town properties is then used to calculate what the tax rate will be. Each year the town may re-evaluate the tax rate to obtain the monies needed to run the town based on that combined assessed value. So tax rates may change from year to year but assessments usually do not.
Appraised Value: An appraisal is a report created by an appraiser to determine value. The appraiser will use recently sold prices of similar properties making adjustments for differences between the subject property and the comparables. Some of the items used by the appraiser to arrive at an appraised value: similar square footage, type of home, construction, age and condition of homes that have recently sold in your area.
Fair Market Value: Is the price a buyer is willing to pay and a seller is willing to accept. It’s the amount your house is worth in the market today, regardless of how much you paid for it.
Some of the factors that affect the fair market value:
- Whether it is a buyer’s or seller’s market
- Level of competition among buyers in the area
- Status of interest rates and the overall lending climate
- Average number of days homes are sitting on the market
- Whether homes are selling for above or below the listing price
In summary, there is a lot involved in determining the fair market value of a home. A realtor can provide the expertise to evaluate your home, discuss market conditions, and assist you in deciding on the proper list price.
Karen Knight is a real estate agent with Coldwell Banker. Reach her at 319-360-8989 or via cbhrealty.com/karenknight.
