Whenever we sit down with sellers to discuss selling their property, we always talk about pricing. During that conversation, the question about the differences of assessment, appraisal, and market values always comes up. Here we talk about the differences of those values.
Assessment: The value placed on your home by the municipality for the purpose of tax collection. This value is independent of market value, and some properties can go years between changes in assessment despite shifts in market values.
Appraisal: An appraisal is conducted on behalf of the bank to ensure the bank isn’t lending more money than a home is worth. Appraisals are often more relevant than assessment values, although they aren’t fully indicative of market value. Some appraisers won’t use properties that have different characteristics such as style or size despite the effect this could play on the market value of each property.
Market Value: This is where you want to price your home. Market value is the amount a reasonable buyer is willing to pay and a reasonable seller is willing to accept for a home.