Friday, March 15, 2019 / by Jo Skipper
What do these values mean and why are they different?
As a seller you want to know how much your home could sell for. In your initial stages you may begin searching for the value online. In this search you come across different types of values and all have different amounts. What does this mean to you and your bottom dollar?
The first is the assessed value. This is the number the tax man cares about. This number can be found on your country website. Often, this is broken into land value and value for the existing structure then the combined value. This valuation is used to derive property tax. Out of the three types of valuation we talk about today, this is the least accurate in terms of sale price for your home. The country provides homeowners with an assessed value for their home once a year. If you experience a sudden jump in this amount and your taxes have increases significantly incorrect, you can challenge the assessed valuation. There are various ways to support your claim or grievance at the hearing. Based on the information provided the County will decide if the properties assessed value needs to be adjusted.
Appraised Value is important to those who have a mortgage, refinance, or home equity line. An appraisal must be completed by a licensed appraiser. This appraiser takes everything into account, not only the condition of the home but also the neighborhood. While a homeowner can ask for an appraisal at any time at their own expense, it is most commonly performed as part of the mortgage application or refinance process. The mortgage company requests an appraisal to ensure that the home that is being purchased or refinanced is worth what the buyer is offering to pay (with money from said bank) . If the home does not appraise then the buyer has options that were put in place within the contract.
The last option and the one that is often most important to sellers is the market value. What can a seller make in this market? While this is closely tied into the appraisal value it can vary slightly. The market value is usually provided by a Realtor and is used to obtain a current market value based on recent sales. The Realtor obtains a market value for a property by performing a CMA (Comparative Market Analysis). This involves comparing recent sales of similar homes in the nearby area and using this data to provide a value or a range of values. This is often done in order to decide the listing price of a property, or to ensure that a home is fairly priced before a buyer offer is written. This number is only slightly different than the appraisal value because in a busy market a buyer may offer above what the home would appraise for. This cost is responsible only to the buyer in the form of cash as a bank will not finance above the appraised value. (Remember 2007 anyone?) The tactic is only used in certain situations and usually in hot markets.
So now that this is slightly more clear, happy selling! Working alongside a real estate professional you can obtain the highest value for your home.