Determining the value of your property can be a tricky business. Value is of course, in the eye of the beholder. However, the value of your property can vary depending on who you talk to. Two common ways that property values are determined is through an assessment and an appraisal. What exactly is the difference between an assessment and an appraisal? Here are a few ways to tell the difference from eachother.
An assessment is what is used to determine the taxable rate of your property tax. The county that you live in will have an assessor s office. The assessor may or may not be a trained real estate appraiser. They are faced with the burden of evaluating every property within the county limits. Whatever value they come up with is the value that they will use to determine your property taxes. Therefore, what they have to say about your property affects you directly.Most of the time, the information that the appraiser comes up with is completely wrong. They are basing their information data that was collected years ago. Sometimes, this can be to your advantage because the value that they come up with is much lower than you could sell it for. Therefore, you are paying less taxes than you should. They will typically do an update on the assessment once every 10 years or so. Therefore, if your house goes up in value, you might not get charged for it on taxes for another several years, if ever.
An appraisal is a completely different animal. Every time you get a mortgage or refinance your home, you will have an appraisal done on your home. An appraisal is done by a certified real estate appraiser. They are trained in the art of figuring out exactly what your home is worth. They will do this through a number of different methods. What they say can affect the amount of money that you can borrow or whether or not you can get a home equity loan.
There are a number of different ways that an appraiser could come up with the value of your home. One way to do so is to use comparable sales. With this method, they will look at all of the houses in your neighborhood that have sold in the last six months. They will use these houses as comparables. They will use the sale price as a starting point and then add or subtract based upon what your house has. If you have more features, they will add something for each of them until they arrive at a price.
Another method that they may use is to determine what it would cost to build your house from scratch. Once they come up with a new house value, they may subtract something for depreciation to get to the current market value. With either method, they can come up with a pretty accurate measure of what your home is worth.
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