What’s the Difference Between Market, Assessed, and Appraised Value?
We hear from clients all of the time that their homes have been “assessed” for x number of dollars. What does this really mean? Is this important if you’re buying or selling a home?
Before we explain what “assessed value” means, we first need to understand “market value.”
A home’s "market value" is simply what buyers are willing to pay for a particular home in a specific market.
Market Value is determined by a number of factors, including the real estate market in a particular community, the size of the home, the condition of the home, and even current interest rates. An experienced real estate professional, like the ones with Landmark Realty Services, can provide you with a quality estimate of your home’s market value, based on comparisons to homes of a similar size and condition that have recently sold in that community.
A few homeowners today go to Zillow.com to receive a “Zestimate” of their home’s market value. Although this estimate can provide you with a “ballpark” idea of your home’s market value, the estimate provided by Zillow is based on national market conditions, not the local real estate market. As a result, the estimate provided by Zillow is often incorrect, compared to local market conditions in north central West Virginia.
The “assessed value” of a home in West Virginia is 60% of a home’s market value, as determined by the county assessor. Homeowners pay property taxes based on the assessed value of their homes. For this reason, the market value of a home is typically significantly higher than its assessed value. A home with a market value of $200,000 (as determined by the county assessor) will only have an assessed value of $120,000.
Because county assessors don’t have the time or personnel to reassess a home’s market value every year, the assessed value of a home typically lags behind its true market value. As a result, a home may have an assessed value of $120,000, but a true market value (what someone is willing to pay for the home) of $240,000 or more.
Whether you’re the homeowner or a person buying the home, a home’s assessed value merely pertains to the value affixed to the home for property tax purposes (homeowners have the right to appeal their home’s assessed value, if they believe that their home’s assessment is too high.).
Lastly, a few people often confuse “market value,” or “assessed value” with “appraised value.”
An appraisal, typically required by lending institutions, is used to determine the value of a home in the local market. In reality, the "appraised value", as determined by a third-party professional appraiser, should be significantly more than the assessed value but very close to the market value estimate provided by an experienced realtor.
Many homeowners often interchange the words, “assessed”, “market”, and “appraised” with one another, when in reality they are three entirely different terms.
Call the real estate experts at Landmark Realty Services today at 304-842-5298 to learn more about these often-confusing terms, to list your property, or to have us help you find your dream home!