The fact that they paid $420,000 does not mean that is the true value of the home. Certain factors may weigh in — undesirable businesses located
near the property, for example. Online valuations cannot possibly take into consideration the condition of the property or the qualities of the neighborhood.
Unlike the definition that market value is what a seller is willing to sell at and what a buyer is willing to buy at when you have a lender involved, it becomes "at what value a lender is willing to lend against". This is why lenders perform appraisals. Unfortunately, however, I can hire 3 appraisers to appraise the same piece of property, and many times the values of all 3 appraisals will be different from each other - but they should be close. Since an assessed value is for tax purposes only, it can be much more or much less than the market value. Most homeowners believe mistakenly that they should be the same, but usually, they are not; it is based on a percentage of the appraised value determined by a professional. From legal descriptions to onsite inspections to comparable home-selling prices, the assessor will consider all these things when assessing a home. Other details such as location near industry, high traffic, or potential development will also affect the appraisal value.
PROFESSIONAL APPRAISAL
No tools or books determine the exact price a piece of real estate will ultimately sell for. The final determination is what the home ended up selling at (within the scope of market forces and appraisals from a lender if the home is going to be financed). Houses are not same-priced identical cans of tuna on the grocery store shelf or shares of stock valued and traded every day on the
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