Determining Home Values? Appraised v Assessed v Market Value

Determining Home Values? Appraised v Assessed v Market Value
This is a question on a number of home owners minds, so for those who are wondering, here are the answers.
  • Assessed Value – these values are determined in July of the previous year. The assessors derive their numbers based on sales of similar homes in the area as well as the knowable features of the home, property  & neighborhood. I say knowable because the assessor does not normally enter the home or inspect the backyard. So they will not necessarily be aware of all upgrades or special features. They also may not know the exact number of bedrooms, bathrooms or suites if they were added later and without permits. They also might not be fully aware of the amount of usable land on a property, especially if it's acreage. The main goal of the assessed value is to help municipalities determine the amount of property tax owed by home owners. The actual market value could be higher or lower then the assessed value depending on the current market conditions.
  • Market Value – these values are affected by the same things as the assessed value but better reflect the “current value of a home and property because a lot can change in 6 months. Real estate agents are the most adept at determining the market value as they will take more time examining in depth the features & upgrades of a home, recent solds and actives as well as understanding the current real estate market which can sometimes change rapidly.
  • Appraised Value – this is normally done by a professional appraiser and takes into account the factors mentioned previously. It’s purpose is to give assurance to a lender that the property in question does indeed have a value that justifies or helps secure a tentative mortgage on a property. Essentially the lender wants to know if they could recover their investment should the purchaser not be able to make their mortgage payments and the lender is forced to liquidate the property. So the goal would not be to maximize the sale value of a home but rather the banks security on the mortgage. Typically this value will be lower then market values.
To dig into this topic futher, please don't be shy and contact me. I am easy to reach and easy to talk to. I also value what you have to say and am curious to hear how you view the market. I take this approach with all my clients and want us to be partners in any transaction. My cell is 604-308-2063 and email
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