Assessed vs. Appraised Value
& which one matters more when it comes to a mortgage
July 2014
Dear neighbor,
In recent emails I discussed how to make your offer stand out & frequently asked questions many home buyers have. Very often I have clients refer to the "assessed value" when trying to determine whether a home is priced correctly, so I wanted to point out how this number is different from "appraised value" and how they rarely align. The purpose of my newsletters is to help you be as prepared as possible, so that together we can achieve your real estate goals. As always, feedback & questions welcomed!

Assessed Value vs Appraised Value


The assessed value is a number that can be found on public record, a town/city's assessors database and within an MLS listing. It's the value determined by your city or town for the purpose of assessing the property tax due. It's very systematic and while a town may employ professionals to assist and evaluate market trends, they are usually not going out and visiting every single home in your community. So it's largely based on neighborhood, square footage, number of bedrooms and an often very loose determinant of "updated" vs "not updated". Properties are re-assessed every few years, but not always on an annual basis. Like a "Zillow Zestimate", the assessed value is often very different from the "appraised" or "market" value. In a strong market like we're in, it's incredibly common to see an assessed value 50-100K below the list or sale price. But - don't be deterred - when all's said and done, as a taxpayer you should WANT this number to be lower - because this is the value on which you pay your property taxes on. 


The appraised value, however, is ultimately the market value at time of purchase. The lender wants to ensure that the property is worth what you are paying - so upon the signing of the purchase & sale agreement, the lender will order an appraiser to visit the home.  The appraiser will evaluate and compare to similar homes in the area on the market and sold within the last 6 months (typically); making adjustments between the subject property vs. the others for factors like parking, outdoor space, level of renovations etc. They may use a variety of approaches (market, income, cost) to determine the value. Within a few days of the appraisal, you as the buyer will receive a report detailing the appraiser's findings. 


It's important that the appraised value comes back at or above your offer price; basically you would have to make up the difference in your downpayment if it came in lower. For instance, if you have offered $300k for a property with 10% down, your lender will only lend you 90% of what they believe is fair market value; so if the appraiser reports the home to be worth only $290k, they will only lend you 90% of that number and you might have to increase your down payment (or discuss other loan options).


Both the assessed value and appraised value are important numbers to consider, but for very different reasons!


In my next newsletter, I will discuss local area tax rates, what a Residential Exemption is, the many towns that offer the benefit and the savings for each city or town. Questions always welcome!


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If you or anyone you know is looking to buy or sell this year, I'm happy to help! You can feel confident any referrals will receive top-notch service. Don't hesitate to call me at 508-439-3099 or email


Melanie K. Fleet
Keller Williams Realty
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