Home Value: Appraised Value vs. Market Value

As the name implies, the appraised value of a home is the value that is assigned by a professional real estate appraiser. An appraiser uses many different factors to determine how much a property is worth. Appraisers value properties based on what other homes sell for in the area, and the quality and size of the home they are appraising. Things like the number of bedrooms, how updated the home is, lot size, and what amenities are included in the home all factor into the appraisal. Lenders order appraisals to ensure that they are not loaning more money to a borrower than the home is worth. Appraisers have to be licensed by the state to ensure that they can properly appraise a home. There are two types of appraisals: bank appraisal and tax appraisal. A bank appraisal of the appraised value that is determined by the appraiser hired by your lender, which makes sure your loan amount covers how much the property is worth. A tax appraisal is performed by a government tax assessor that determines the amount of property tax you have to pay.