Assessed vs. Market Value: Understanding the Difference
Understanding the difference between assessed and market value can be complicated. This post delves into the details of each and provides tips to help you understand these concepts.
Assessed vs. Market Value: Understanding the Difference
When it comes to buying and selling real estate, one of the most important things to understand is the difference between assessed and market value. Knowledge of these two terms is key in ensuring that property owners and potential buyers are informed on the true value of a property.
Assessed value is often referred to as the taxable value of a property, and it is established by local assessors or municipality leaders. This value is used most commonly when taxes are calculated, and usually takes into account the size, age and condition of the property in question. It variance is largely dependant on where the property is located and impacts the amount of property taxes you may be required to pay.
On the other hand, market value is the estimated amount which could be obtained by selling a property. Generally speaking, it is the price that a willing buyer would pay and a willing seller would accept for the property. The market value of a property can fluctuate due to various factors, like seasonal demand, changes to the local economy, and current trends in the housing market. Market value is largely dependant on the estimated value of other similar properties in the surrounding area.
In short, assessed value is used to determine taxes for a property and market value is used when buying or selling a property. For sellers, it is important to understand both values in order to ensure that you're getting the best price. Potential buyers should also be aware of both values as it can be helpful in understanding the true cost of the property they are interested in.
Overall, it is important to keep in mind that most of the time, assessed value and market value are not the same. Although they both play an important role when it comes to the value of a property, it is important to understand the differences and how each type of value can affect you.