In recent months, I've fielded numerous questions from both sellers and buyers in Rockland County who are confused about the definitions of market value, appraised value and assessed value, and how these values affect their real estate sale or purchase.
Market value is what a ready, willing and able buyer will pay for your home in normal market conditions. Ready, willing and able means that the buyer can usually close within 90 days, is making the offer to purchase under normal market conditions, and can obtain financing to purchase the home. An example of an abnormal market condition is a foreclosure - when a home is listed for less than its fair market value in order to procure a fast sale. Buyers tend to offer less on a foreclosure because they assume that the bank wants to sell the property quickly. Typically, market value equals closed sale price.
Appraised value is the dollar amount that a bank appraiser decides your home is worth. When you enter into a real estate sales contract, the buyer's lending institution will enlist the services of a certified appraiser to prepare an in-depth comparison of your property to others that recently have sold in your neighborhood. The appraiser adds or subtracts a defined dollar amount for numerous property features to determine value. A bank will lend money on a property's appraised value, regardless of the negotiated sale price. Therefore, appraised value is the bank's assessment of value.
Assessed value is how your town determines your property taxes. Every township in Rockland County has a different formula for determining a home's assessed value. Some towns assess value on their estimate of the fair market value of a home. In other towns, the assessed value is less than the fair market value, so the town comes up with a multiplier every year based on the town budget, and applies it to a home's assessed value to calculate the tax amount. Basically, assessed value is how a township determines real estate taxes.
Although market value, appraised value and assessed value are different estimates of your home's value and are used for different reasons, there is a complex interplay among the three. The nuances among them can't be explained in one short article!
If you are looking to sell or buy in Rockland County, or just would like a more in-depth explanation of how these values affect your property taxes, or the sale or purchase of a home in Rockland County, contact me to discuss it in greater detail.
jennifer mallory | associate broker | "real integrity in real estate"
keller williams hudson valley realty II | 130 main st, nyack, ny 10960
845.521.3135 office | 845.323.6247 mobile | firstname.lastname@example.org
Search all homes for sale in Rockland County, NY at www.jennifermallory.com