Houses and properties do not have their prices written on the doorstep. Real estate properties are objects whose value keeps on varying that makes property trading more thrilling.
It may be frustrating as well if the prices don’t happen to be in your favor.
Whenever you head to the real estate market either to sell or to make a purchase, there will be two different values or prices conveyed to you. These two are known as assessed value and market value of that specific property.
The two terms may appear to be similar but the numbers can differ from each other by a fair margin. So what’s the difference?
What is Market value?
Our real estate experts say that market value can be defined in technical terms as the most obvious price that a property can get you if sold in open market.
In simple terms, its the price that both the buyer and seller can agree upon if a deal has to be made for that property.
Real estate agents possess expertise in pointing towards the market value of a property and justifying it by using certain characteristics related to that property as a weapon. These characteristics include:
- External Appearance: They’ll emphasize on how good the outer paint, size of the garden and view in the street are, making the deal more catchy for you.
- Internal Appearance: Agents often use the number of rooms and internal spacing as a plus point. The latest heating systems may also be part of the deal.
- Demand: An agent would tell you that this sort of home is in high demand these days.
What is Assessed value?
When trying to understand the assessed valued of a property, you must know who is doing the assessing and why the property is being assessed.
Before we get into the definition, you need to know who assesses values of properties.
Municipal authorities in most regions hire an assessor to create a set of values for different kind of homes in that region to imply taxes on these houses.
The assessor carries out the task by observing the surroundings for similar kind of homes. An observation about values of similar properties is made to make a rough assumption about how much can the property be sold for.
Other factors that affect the assessed value include any improvements occurring in the area, any income that can be made out of the property in the future and how much would it cost to renovate the property in case of an emergency.