If you are planning to sell your property, you need to get an appraisal to determine its value in the current market. Two types of appraisals that you may come across are market value appraisal and assessed value appraisal. While both types of appraisals aim to determine the value of a property, there are some key differences that you need to understand. In this blog post, we will explore the differences between market value appraisal and assessed value appraisal.
Market Value Appraisal
Market value appraisal is the most commonly used method to determine the value of a property. It is an estimate of the price that a property would sell for in the current market, assuming that both the buyer and seller are willing and able to transact, and that there is no undue influence on either party. Market value appraisal takes into account various factors such as the location of the property, size, condition, and features, as well as the recent sales of similar properties in the area.
The market value appraisal is typically performed by a licensed appraiser who will physically inspect the property and compare it to recent sales of similar properties in the area. The appraiser will also consider any upgrades or repairs made to the property and adjust the value accordingly. The result of the market value appraisal is a fair market value that can be used to determine the listing price of the property.
Assessed Value Appraisal
Assessed value appraisal is a method used by local governments to determine the value of a property for tax purposes. The assessed value is used to determine the property tax that the owner is required to pay. Assessed value appraisal takes into account various factors such as the location of the property, size, condition, and features, as well as any recent changes to the property.
Unlike market value appraisal, assessed value appraisal is not based on recent sales of similar properties in the area. Instead, it is determined by the local government based on the information they have on file. The assessed value may be adjusted each year to reflect changes to the property, such as renovations or additions.
Key Differences between Market Value Appraisal and Assessed Value Appraisal
The main difference between market value appraisal and assessed value appraisal is their purpose. Market value appraisal is used to determine the fair market value of a property, while assessed value appraisal is used to determine the property tax that the owner is required to pay.
Another key difference is the method used to determine the value. Market value appraisal is based on recent sales of similar properties in the area, while assessed value appraisal is determined by the local government based on the information they have on file.
The value determined by market value appraisal is typically higher than the value determined by assessed value appraisal. This is because market value appraisal takes into account the current market conditions and recent sales of similar properties in the area, while assessed value appraisal does not.
Conclusion
In conclusion, understanding the key differences between market value appraisal and assessed value appraisal is important when it comes to determining the value of a property. Market value appraisal is used to determine the fair market value of a property for listing purposes, while assessed value appraisal is used to determine the property tax that the owner is required to pay. While both methods take into account various factors such as the location, size, condition, and features of the property, they use different methods to determine the value. It is important to consult with a licensed appraiser to determine which appraisal method is best suited for your needs.