The difference between market value and appraised value can be easily explained with the definition of each term
Market value can be defined as the highest price a buyer is willing to pay and the lowest price a seller is willing to accept on a particular piece of property. Another definition for market value is the price a house will sell for within a certain amount of time. One more definition for market value is that it is the most probable price a particular property should sell for in a competitive and open market with all conditions for that market being met by the property, such as the buyer and seller acting on their own and the price not being affected by any undue stimulus. Market value is usually not the price the property could have been sold for, but is the price the property is sold for. Several factors influence market value. These are location to a good school district, well fitting additions to the existing house, well-maintained neighborhood, the house not being over improved or the largest house on the block, and the last is that the style of the house matches the neighborhood it is in. Other factors to consider are the motivation of the buyer and seller, how well informed both parties are, the amount of time the property has been on the market, payment arrangements, and the final price being normal, not being affected by any special or creative financing or sales concessions by any party to the sale.
Appraisal value is defined as the opinion of a qualified appraiser, based on the knowledge, experience and analysis of the property being sold. A thorough property appraisal generally scrutinizes factors that may benefit the homeowner to become acquainted with. These factors include the current market value for same type home, in same condition and in the neighborhood of the homeowner’s property. Considering fluctuations in the real estate market is important as well as the considering the demand for housing of that type at that particular moment must be another consideration.
Appraisal companies generally have access to census data for the particular area as well as the statistics regarding local home sales for the city, county and state where the property is located. These appraisal companies will also have the ability to research the previous sales as well as the tax records of the property. Having access to these records affords the appraisal company the ability to acquire all the facts pertaining to the property and consequently to present a clear value of the property. Getting a thorough appraisal offers many advantages to the seller as well as the buyer.
The difference between market value and appraised value can be easily explained with the definition of each term. The market value of a home, based on the buyer, is the price the market is willing to pay for the property in question. The appraised value is the unbiased value of the property after a qualified person who is generally employed by an appraisal company, real estate company, lending institute or a bank, has completed an inspection on the property.
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