This price of your home can continually fluctuate as values rise and fall depending on several key factors. For this reason, buying and selling a property can be both rewarding and frustrating. A property value assessment can provide the assessed value of a home or its current market value.
If you’re a buyer or a seller, you’ll probably hear one of these ‘prices’ used by realtors, lending companies, or assessors: assessed value vs market value. So, how do these estimates differ?
Although the two valuations can seem similar, there can be a significant difference between them. In most cases, assess values are lower, and they are calculated in different ways.
Now, let’s dig a little deeper so you’re familiar with the jargon and reasoning around your next house assessment.
The Difference Between Assessed Value and Market Value
Assessed Value vs Market Value
Market value is the estimated figure that current active buyers would be willing to pay for your property. This amount is determined by an appraiser, who is generally hired by your lender as they consider how much money to offer in a loan. Alternatively, if you’re putting your home on the market, you can hire an appraiser to help determine your listing price.
Assessed value places the market value into context by considering your property taxes. In most U.S. counties, assessed value equates to a portion of the overall market value and is calculated as a percentage of the property’s market value. For this reason, assessed valuations are generally lower than appraised market valuations.
What is Assessed Value?
When we consider the assessment value of a home, we must know why the property is being assessed and who is doing the assessing. For example, municipalities employ assessors to calculate the value of real estate to levy property taxes.
To work out a value for tax purposes, assessors survey similar properties to see how much they are selling for, any income you may be making from renting parts of the property, the value of any recent improvements, and property replacement costs.
What is Tax Assessed Value?
To calculate tax assessed value, an assessor estimates your home’s value and deducts the relevant tax exemptions for which you qualify. Next, this figure is multiplied by an “assessment ratio,” a uniform percentage set by each tax jurisdiction, ranging from 80-90%. The final figure is the taxable value of your home.
What is Market Value?
Market value is the estimated value of a property based on supply and demand, the local real estate market, and the features and benefits specific to that property. This is not to be confused with the market price, which can be higher or lower than the market value.
When it comes to a home assessment for market value, price is the figure at which the seller agrees to sell the property. This could be equal to the market value, or the seller may decide to accept less, especially if they favor a quick sale.
Raising Your Home Value: Next Steps
When it comes to assessed value vs appraised value, there are several steps you can take to increase both estimates:
Ensure the property is low maintenance
One of the main concerns for home buyers is ongoing property maintenance. Therefore, replacing or repairing any significant components such as rooftops, furnaces, or insulation areas can calm their fears and help you net a much higher sale price. You should also consider replacing high maintenance siding and replacing easily stained carpets with hardwood or vinyl alternatives.
Give your house curb appeal
First impressions can have a considerable impact on potential buyers. Therefore, it’s essential to make the outside of your home look good. Make sure that all your landscaping is well-maintained, and if your yard looks disheveled compared to your neighbors, make a conscious effort to spruce it up.
Make your house more efficient
Double glazed windows, LED lighting, enhanced attic insulation, and energy-efficient appliances can all increase your home’s appeal to potential buyers.
Increase the size of your property
Bigger homes frequently command higher values compared to similar properties that are smaller. Adding an extension is the easiest way to enlarge your house. However, building a deck or converting the basement into a living space can also increase the property’s value.
Make your home smarter
Smart safety devices such as fire detectors, thermostats, security cameras, carbon monoxide detectors, lighting, and enhanced door locks are all popular with today’s home buyers. Although they won’t necessarily increase your home’s value, they will appeal to buyers.
Sell Your House Now!
Implement all five of the above steps, and you’ll likely see the value of your home increase during your next home assessment.
However, if you want to save the hassle of valuations, we can make a cash offer for your property in just five minutes. We pay cash for single- and multi-family townhouses, houses, or apartment properties “as is” in Texas, Georgia, and Florida.
For a free, no-obligation estimate, call (855) 931-4635 or fill out this form on our website today.