The assessed value and appraisal value are different metrics used for distinct purposes in real estate, and which one is higher depends on the property and location. Here’s a breakdown of each:
Assessed Value
- Determined by the local government for property tax purposes.
- Often a percentage of the market value (e.g., 80-90% or less).
- Tends to be lower than the market value or appraisal value to calculate taxes.
Appraisal Value
- Determined by a professional appraiser for a specific purpose, like buying, selling, or refinancing.
- Reflects the market value of the property at the time of the appraisal.
- Typically more accurate and higher than the assessed value.
Which is Higher?
In most cases, the appraisal value is higher because it reflects the current market value of the property, while the assessed value is often a conservative estimate used to determine taxes.
However, exceptions can occur if the property is in a declining market or if the local government updates assessed values more frequently than expected.
Related
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Residential Appraisal in Real Estate: Unveiling the Valuation Process
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