The difference between appraised value and assessed value
Sellers and salespeople consider factors such as the number of bathrooms and bedrooms; curb appeal; the local school system's quality; and the home's proximity to public transportation to set a sales price. But some buyers are willing to pay tens of thousands of dollars above market price, if they fall in love with a property, says American Society of Appraisers Executive Vice President Edwin Baker.
An appraiser will determine a house's value based on the prices of similar homes that have recently sold in the area, as well as the number of bedrooms and bathrooms, yard size, additions, and the property's overall condition.
The assessed value--used to calculate the amount of property tax the homeowner must pay--is typically less than appraised and market values. To determine the home's worth, assessors will either compare recently sold homes, factoring in influences that may have boosted or reduced the sales price; tabulate the cost of replacing the home with a similar one; or calculate how much income the property would generate if it was rented.