These two terms should not be confused, as they mean very different things.
Appraised Value refers to the value an appraiser assigns to your home using comparable and adjustments.
If you are using a mortgage loan to buy a home the bank will require an appraisal. The appraiser will perform his job and deliver a number value for the home. This number will determine how much the bank will lend you. The appraised value is very important, and here’s why.
If a seller is asking for $250,000 but the appraisal came back showing the value to be $225,000, your bank will only lend you $225,000 because of the risk involved in loaning more than appraised value. Unless you can provide the remainder in cash or talk the seller in to coming down, you will not be able to buy the home.
In todays market, many homes are being sold over appraised value, as many cash buyers are coming in and do not need an appraisal approved by a bank. Many buyers are willing to pay the difference in cash.
Assessed value refers to the amount your local government says your house is worth. This number is used to calculate property taxes. Everyone must pay property tax, right? If someone offers to buy your house for “assessed” value, please call me first. You will likely be able to make more than that if you let me sell it for you!
Are you ready to list your house in Northwest Arkansas? I’d love to help! Call me, Jill Bell, at 479.799.3023.