Appraised Value Vs. Assessed Value of Home

The appraised value of a property typically does not equal its assessed value. Although this statement may seem to defy logic, in reality, these values rarely equal because they are based on two separate sets of criteria

The Appraised Value

An appraised value pertains to a property's estimated value. It is the opinion of an experienced and professional appraiser who examines the property and sums up its worth. This value is often based on market analysis, or the recent sale prices of similar properties in the same neighborhood.

When is an Appraisal Necessary?

A mortgage lender often requires a property appraisal before they make a decision on a loan application to purchase it, or on a second mortgage or home equity loan application.

The Assessed Value

An assessed value of a property is the dollar amount used to compute local property taxes. A tax assessor uses similar criteria as an appraiser, such analyzing the recent sales prices of similar homes in the same neighborhood, but the assessor is likely to take it a few steps further. They will also investigate how much the property has appreciated or depreciated, and how much it would cost to replace the property, taking into consideration the current material and labor costs.

Other Differences

Another reason why the appraised value and the assessed value of a property rarely equal is because property assessments are completed yearly to make sure property taxes are accurate. Property appraisals are not performed as often and may be outdated by the time the next property assessment is performed.

Learn More

Information regarding property tax assessments varies by state. You should always consult your tax adviser for the complete picture, and with questions and concerns. To learn more about property appraisals or to find a qualified appraiser near you, go to find-appraisers.com.