Assessed value and market value are terms used to assign an amount to a house but they do not have the same meaning. Sadly, you could lose a lot of cash on a home deal if you don’t know how to apply each term.Kindly, follow me on this exercise in understanding these terms below:
While ideally, a home’s assessed value is its real market value but that isn’t always the case. The real market value of your home can vary a little or a lot from its assessed value, which is determined by tax assessors for the purpose of calculating property taxes. Think of the assessed value as a baseline with various qualities of your home like its location and any recent renovations that potentially increasing its value although the overall market will play a large part in determining its value.
An appraisal of the property helps to determine your house value by taking into account recent properties for sales in your neighbourhood and the unique qualities of your house.The true market value of your house will depend on what a buyer is willing to pay for it although there are a number of factors that can influence the value of your home. Before listing your home for sale or rent ensure to get the advice of a professional appraiser or agent who will provide an objective assessment of your home’s current market value based on an inspection of your home and the surrounding neighbourhood as well as any recent sales in the area. An agent can give you a sense of the current local and global market and any considerations or renovations that may increase the value of your home in the minds of potential buyers.
Homes don’t come with price tags but they change from time to time.Hence, that’s what makes buying and selling real estate so exciting or frustrating depending on your property.
According to Casey Fleming, the market value is the price that a buyer is willing to pay for a home, and that a seller is willing to accept.
Agents determine a home’s market value by assessing a variety of characteristics, including the following:
External features: selling point, exterior condition of the home, home style or availability of public utilities.
Internal features: Size and number of rooms, bathrooms or kitchen
Other houses for sale or rent: What similar homes in the same area have sold for recently.
Supply and demand: The number of buyers and the number of sellers in your area.
Location: How desirable is the neighbourhood? Are the schools good? Is the crime rate low?The proximity of the house to facilities like hospitals or banks?
There is no right or wrong market price as long as the ultimate deciding force is what price a buyer and seller are willing to shake hands on to close the deal.In relation to assessed price, you must know who is doing the assessing and why the property is being assessed.In some countries, assessor analyses the property in order to assign property tax on it. To arrive at a value, the assessor, similar to a real estate agent, looks at what similar properties are selling for or any income you may make from the property.In the end, the assessor comes up with a value of your home. Then, he multiplies that number by an “assessment rate,” a uniform percentage that each tax jurisdiction sets.
It should be remembered that market value at the end of the day is all in the eye of the beholder. The only number that matters is what a buyer and seller can agree sounds right, so don’t take any number you see too seriously.Assessed value pertains to the amount that a local or state government has designated for the specific property. This assessed value will be used when a property tax is levied by the government.
In the future, when reviewing the value of a home, be sure to look closely at market value (which you now know is the price put on the home based on the home’s current immediate environment, but still pull up the assessed value from the tax appraiser’s website. The combination of the two values will equip you with a wealth of knowledge so that you can act as an informed individual and not one that is blindly entering into an expensive transaction in the real estate market.