Four Ways to Look at Home Value

Value of house articleHow much is your home worth? Or the one you’re thinking of buying? Answering that question seems straightforward, but there are at least four ways to define home value, as we outline below.

Appraised Value — A property’s worth based on the evaluation of a professional appraiser assessing traits like size, overall condition, special features and so on.

  • Lenders use appraised values to help determine the size and terms of a home loan. An appraisal is almost always required when you first purchase a home, but may also be requested for a refinance or home equity lending.

Assessed Value — Figure assigned annually by your local government, taking into account the property’s appraised value, comparable home sales and local market conditions; usually lower than appraised value.

  • Your property taxes are based on your home’s assessed value. If you feel your assessed value isn’t accurate, you can dispute the number with your local government.

Market Value — The price for which a home actually sells or an estimate of what it will sell for in a reasonable period of time (usually considered 30 to 90 days).

  • Market value is based largely on the home’s features, condition and location, as well as recent sale prices of comparable properties in the area.

Appreciation — The increase in the value of your home over a period of time due to changes in overall market conditions, in your specific neighborhood or to the home itself (renovations).

  • Homes may also depreciate (decrease) in value, if market or neighborhood economies take a negative turn, or if your home’s condition deteriorates.

Learn More

Home value isn’t the only confusing term when it comes to buying, selling and owning a home. To decipher more lingo, check out our Loan Terminology page or contact us directly.

Also make sure to take a look at our blog and Inspirations Newsletter.

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