The Difference Between Appraisal and Assessment

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The Difference Between Appraisal and Assessment

Henderson Real estate agents, Property Management in HendersonMany home owners become confused with the difference between an Assessment and an Appraisal. Although both of these terms are used in the real estate industry by both home owners and real estate agents, the difference between the two is quite substantial.

An appraisal represents the fair market value of your home in comparison to other homes on the market, previous sales, condition of home, location and community, size and type of construction. An appraisal is done specifically by an Appraiser. Most appraisals are completed for the purposes of buying or selling a home where a qualifying bank would need an accurate value of the property. Banks and Mortgage lenders use this information to determine the type and amount of loan they agree to provide to the home buyer.

An assessment, however, is the value of your home as decided upon by your community or city’s tax assessors, using mixed formulas of comparable homes, recent sale prices, trends, economy and other factors. Its very common that the assessment of a home is very close to the amount of the appraisal. However, often times upgrades and renovations or the current market condition can have substantial effects on the dollar amount the value of the home is decided upon. One thing to note, most assessments do not change from year to year. Only when the dates from a previous assessment has become outdated will a town go through and reassess homes.

An appraisal is a more valid evaluation of your property than an assessment if you are really looking to know the value of a home in question. Any decent real estate agent can give you an estimated assessment based on the appraisal information. Especially if they live and work within the area in question.

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