• Market value: The most probable price a property should bring in a competitive, open market, under conditions requisite to a fair sale. • Appraisal value: An evaluation of a property's worth at a given point in time, performed by a professional appraiser. Appraised value plays a crucial role in loan underwriting, determining the maximum loan amount and terms. • Assessed value: The amount local or state government has designated for a specific property, often differing from market value or appraisal value. Assessed value serves as the basis for property tax calculations.
Determining Your Home's Worth
Several factors contribute to a home's value:
1. Professional Appraisal: While no single factor dictates a property's sale price, the final selling price remains the ultimate determinant of value. Unlike identical cans of tuna or traded stocks, homes are unique entities with distinct features and characteristics. Real estate appraisal, also known as property valuation, is the process of developing a perspective of value for real property. The appraiser aims to determine the market value – the price a willing buyer would pay to a willing seller in a competitive market. Real estate transactions generally require appraisals due to their infrequent nature and the unique characteristics of each property. An appraisal serves various purposes: • Sellers can use the appraisal as a basis for pricing their home. • Buyers can use it as a benchmark for their offer. 7
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