When it comes to understanding your home's value, terms like "appraised value" and "assessed value" can be confusing. But knowing the difference is important. The appraised value determines market worth for buying or selling, while the assessed value calculates property taxes. 

Let’s learn about the difference between appraised and assessed value. 

Appraised Value

A certified appraiser evaluates your home's worth based on its condition, size, location, and recent sales of similar properties nearby. This gives you a fair estimate of its market value. Appraisals are commonly needed when buying or refinancing a home to ensure it aligns with the loan amount. They're also useful when selling your home to understand its market value clearly.

Assessed Value

Local government assessors determine your property's assessed value to calculate your property tax bill. They consider factors like market trends, any upgrades to your home, and local tax rates. Assessed values are usually lower than appraised values because they're focused solely on taxes. They help determine how much tax you contribute to supporting community services and schools.

What Makes Them Different

Here's the big difference between appraised and assessed values:

• Purpose: Appraised values tell you what your home is worth in the real estate market, whether you're buying, selling, or refinancing.
• How They're Determined: Appraisers look at your home's features and recent sales to come up with an appraised value. Assessors use a set formula based on local rules and trends to calculate your assessed value.

Why It Matters

Understanding the difference between appraised and assessed values can help you in a few ways:

• Financial Planning: Your home's appraised value helps you decide on refinancing, selling, or making improvements. Knowing your assessed value assists in budgeting for property taxes.
• Negotiating: When buying or selling, understanding your home's appraised value aids in negotiating a fair price. If it's lower than expected, there may be room for negotiation.
• Tax Planning: Tracking your assessed value helps plan for property taxes and detect possible increases.
  

End Note 

In a nutshell, while appraised and assessed values both provide insight into your home's worth, they serve different purposes and are determined differently. Knowing the difference can help you make smarter decisions about your home and your finances.