At Home With Lisa - What Is The Difference Between Assessed Value, Market Value and Appraised Value?

If you're in the process of buying or selling a home, you may wonder why the county assessment is different than the market and appraised value of the home.

home value

Why is your home assessed at $200,000 through the county, but your real estate agent is telling you to list it for $175000?  You feel strongly that your home is worth every bit of the $200,000!

Or why are you looking at a home for $250,000, but it's assessed at $220,000?  Is it overpriced?

Or why is your home assessed for $245,000, your real estate agent told you to list your home for $255,000, but the appraiser said your home is worth $250,000?

That is because there are different types of valuation, and as a home buyer or seller, you should be aware of each type, the purpose of the valuation, and how it is determined.

Assessed Value

The assessed value of a home is the tax value, which is determined by the county for property tax purposes.  It is intended to represent the correct value of a property, but they struggle to keep pace with the actual market.  Once a year, maybe every two years, the county will determine the assessed value of a home.  It is a type of mass calculation system, where they look at homes that sold over the past year and raise or lower the amount as a whole, by a ratio, not individually.  The problem with this is that it does not take into consideration if a home's interior has been renovated, or even if it's been damaged like from a storm.  Therefore, when it comes to a listing price, your real estate agent will use the assessed value as a guide but definitely not an absolute.

Market Value

The market value of a home is simply what a buyer is willing to pay, and what a seller agrees to sell for in today's market.  It's typically provided to  you by your Realtor for the purpose of finding you a suitable list price as the seller, or an offer price for a buyer.  When determining the market value, the Realtor will compare nearby properties, gather recent listings, pending sales, and closed sales within the past 6 months.  Sometimes even use Expired and withdrawn listings.  The Realtor will research the current condition of the home, the maintenance upkeep of it compared to other homes that have recently sold.  The Realtor will also consider the current supply and demand for the neighborhood and/or area that the home is located in.  The market is fluid and it can fluctuate with time, so a good real estate agent will be able to pinpoint an accurate market value in order to get you top dollar with the shortest listing period possible, and will greatly reduce the chances of issues with the appraised value once the bank appraisal is done.

Appraised Value

The market value and the appraised value are very similar, however an unlicensed professional cannot provide the appraised value.  It must be completed by a licensed appraiser.  If you are a buyer, then your bank will choose an appraiser to determine the appraised value to the lender approving the loan.  The purpose of the appraisal is to ensure that the sales price is at market value or greater.  The appraised value of a home is an important factor in the loan underwriting process and plays a role in determining how much money may be borrowed and under what terms.

I'm Lisa Longest with Realty Navigator. I am a full time Realtor┬« and PSA┬« in Anne Arundel and Queen Anne Counties. I am here for all your real estate needs. If you are looking to buy, sell or question me about the market in your area, feel free to contact me. My email is and cell is 443-786-4200.