Tips for Buyers and Sellers

What Is Appraised Value?

It's an objective opinion of value, but it's not an exact science so appraisals may differ.

For buying and selling purposes, appraisals are usually based on market value-what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.

Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.

Appraised value doesn't consider special considerations, like the need to sell rapidly.

Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.

Appriased value is always based on the best and highest use of the property. If the home is being used as a farm and it is worth more as a commercial property, the appriased value should be based on the highest valuation.

Used with permission from Kim Daugherty, Real Estate Checklists and Systems (http://www.realestatechecklists.com).