Difference between an APPRAISAL & ASSESSMENT

When it comes to buying or selling a property, there are two terms that are often confused with one another: appraisal and assessment. Understanding the difference between these two terms can help you make better decisions when it comes to investing in real estate. In this blog post, we will explore the differences between an appraisal and assessment, and how they affect sellers, neighborhoods, and investors.

Sellers

Appraisals are typically used by sellers to determine the fair market value of their property. An appraisal is an independent evaluation of the property's value, based on factors such as the property's location, size, age, condition, and recent sales of comparable properties. The appraiser will provide an unbiased opinion of the property's value, which can help sellers set a fair asking price.

Assessments, on the other hand, are used by local government agencies to determine the value of the property for tax purposes. Assessments are typically based on the estimated value of the property, and may not reflect the current market value. This means that the assessed value may be higher or lower than the fair market value of the property.

Neighborhood

If you're looking to buy a property in a particular neighborhood, an appraisal can help you determine whether the asking price is fair. Appraisals take into account the location of the property, as well as the quality of the neighborhood. This means that an appraisal can help you determine whether the property is overpriced or underpriced, based on the current market trends.

Assessments, however, do not take into account the quality of the neighborhood. This means that the assessed value of a property may not reflect the true value of the property, especially if the neighborhood is undergoing changes.

Investing

Finally, if you are an investor, understanding the difference between an appraisal and assessment is crucial. Appraisals can help you determine the fair market value of a property, which can help you make better investment decisions. Assessments, on the other hand, may not reflect the current market value of the property, which can lead to overpaying for a property.

In conclusion, there are significant differences between an appraisal and assessment when it comes to real estate. Appraisals are based on the current market trends and provide an unbiased opinion of the property's value, while assessments are based on estimated values for tax purposes. Understanding these differences can help you make better decisions when it comes to buying or selling a property.