Appraised Value v. Market Value

The difference between real estate appraised value and market value lies in their definitions and the methods used to determine them:

Appraised Value:

The appraised value is the estimated value of a property determined by a certified appraiser.

It is typically calculated using various factors such as the property’s condition, size, location, comparable sales, and other relevant data.

Appraisals are often conducted for various purposes including mortgage lending, estate planning, taxation, and investment analysis.

The appraised value is determined by a licensed professional who follows specific guidelines and standards set forth by professional appraisal organizations.

Market Value:

Market value refers to the price at which a property would sell under current market conditions.

It is influenced by factors such as supply and demand, economic conditions, interest rates, location, and property condition.

Market value is what a willing buyer and a willing seller would agree upon in an open and competitive market.

Unlike appraised value, which is determined by a single appraiser’s assessment, market value can fluctuate and is subject to change based on the dynamics of the real estate market.

Key Differences:

Appraised value is determined by a certified appraiser based on specific criteria and guidelines, while market value is influenced by broader market forces and negotiations between buyers and sellers.

Appraised value is typically used for specific purposes such as obtaining financing or determining the value of an estate, whereas market value reflects the current value of the property in the open market.

Appraised value may not always align perfectly with market value due to differences in methodology and timing of the assessment.

In summary, while both appraised value and market value aim to estimate the worth of a property, they serve different purposes and can vary based on the context and methods used for their determination.

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