negotiation opinion of what a house should bring in its local market, i.e., its geographical area, generally an area such as a suburb or neighborhood. More simply it is also defined as "What a seller is willing to sell at and what a buyer is willing to buy at". Appraised value is an evaluation of a property’s worth at a given point in time that is performed and determined by a professional appraiser. Appraised value is a crucial factor in loan underwriting and determines how much money may be borrowed and under what terms. For example, the Loan to Value (LTV) ratio is based on the appraised value or sales price whichever is less. Where LTV is greater than 80%, the lender generally will require the borrower to buy mortgage insurance. Assessed value (different from appraised value) is the amount local or state government has designated for a specific property and frequently differs from market value or appraised value. The assessed value is used as the basis of property tax and when a property tax is levied. The assessed value of real property is not necessarily equal to the property’s market value or its appraised value. Approximately 60% of U.S. properties are assessed higher than their current market value; however, this does not reflect the home’s actual value.
WHAT IS YOUR HOME TRULY WORTH?
The first step in selling your home is knowing the difference between value, worth, and price. Let’s examine the determining factors at work. Understanding those factors allows them to be leveraged. There are several ways a home’s value is derived.
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