When it’s time to sell your the Bay Area home, there can be some confusion when determining the value. If you REALLY want to know what it is worth, you can pay to have an appraisal done. An agent should be able to provide you with detailed CMA reports, letting you know what is going on in your neighborhood. Knowing the differences in these home values can set you set your ideal asking price!
What is Market Value vs Assessed Value in the Bay Area
Market Value by Definition:
According to Fannie Mae, “Market value is the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.”
The anticipated amount of money that a homeowner can expect to receive from the sale of their property is known as the expected sale price. This value is based on the current market value of the property and assumes a smooth transaction process with potential buyers regularly inspecting the property over several months.
Assessed Value by Definition:
According to Investopedia, “An assessed value is the dollar value assigned to a property to measure applicable taxes. Assessed valuation determines the value of a residence for tax purposes and takes comparable home sales and inspections into consideration.”
Assessed value of a property can be perplexing as it is determined by county property assessors for tax purposes, which may not necessarily reflect the current market value of a property. The gap between the assessed value and market value is called the equalization rate. It is used by the county to calculate the actual value of a property for tax purposes. Therefore, the assessed value is not always an accurate indicator of a property’s true value in the current market.
Appraised Value:
When determining a property’s value, it’s essential to consider the appraised value in addition to the assessed and market values. The appraised value is determined by a licensed professional who conducts a comprehensive evaluation of the property. However, it’s important to note that the appraisal reflects the opinion of a single individual. On the other hand, assessed and market values are calculated using mathematical formulas based on the property’s history and prevailing market conditions. Considering all three values can provide a more comprehensive understanding of a property’s true value.
What The Internet Has To Say About It:
Big real estate websites have developed their own methods for estimating property values. These estimates are generally based on information inputted directly by users, as well as broader market trends. However, they may not necessarily reflect the true value of your individual home. It is similar to how Kelly Blue Book provides a general idea of the value of a car, but the actual market value may differ. Some people have reported seeing these estimates off by tens of thousands of dollars or more. Therefore, it is important to not rely solely on these online estimates and to consider getting a professional appraisal or consulting with a real estate agent.
What it Means For You As A Seller:
The recommendation is to conduct a thorough investigation and collect all pertinent information, which includes comprehending essential terminologies such as fair market value and the equalization ratio, to determine the true market value of your property. It is crucial to engage a qualified professional, such as a licensed appraiser or real estate agent, to ensure an accurate evaluation of your property value. Their expertise can provide valuable guidance to help you make informed decisions regarding your property.
When it comes to selling your property, it is crucial to set a suitable asking price. If the price is too high, it may turn off potential buyers, and repeated price reductions may give the impression that there is something wrong with the property. Additionally, your pricing history is publicly available, and buyers can easily access it. Conversely, setting the price too low can result in missed opportunities to maximize your returns. To achieve the desired price for your property, it is essential to remain patient and work with a qualified professional in the Bay Area. A knowledgeable real estate agent or appraiser can help you determine a fair market value and set an appropriate price that attracts potential buyers while ensuring a profitable sale.