What is Appraised Value?
Well, it is not an exact science. It is an objective opinion of value, so appraisals may differ. There are also different kinds of appraisal for different purposes in Real Estate. I can't tell you how many times clients will say how come that home is so much less on the tax rolls then what it is listed for? That is an example of an appraisal by your friendly property tax assessors vs.market value. Market Value is what a buyer is willing to pay based on comparatives from the MLS.
I know this is kind of a dry topic, but it is important so I will just highlight important points, please read on...
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 the appraised value.
Appraised value does not consider special considerations,
like the need of the seller to sell rapidly because of job loss, death, illness, bad luck, poor judgment, need to liquidate etc. That is why there is always deals to be had in any market and the world.
Lenders usually use either appraised value or sale price,
whichever is less, to determine the amount of the mortgage they will offer for a particular property. There can be some wiggle room here...
For people wanting to sell their properties,
most the time it is a good idea to get an appraisal done before you list. If you have done a lot of updates etc. a professional can give you a detailed value of location, lot information and value of your updates, and a REALTOR who knows the neighborhood can certainly give you a value range to get you more money for your updates that you have spent a lot of time and money on.
For people wanting to buy properties,
the value on the property tax rolls sometimes varies 10%-50% less than what the market value of the property is listed for. This changes dramatically by neighborhood. It is safe to say that if you can buy a home at or below the assessed value you are making your money going in and that is a great deal! (most investors try to buy at 20% below market or assessed, depending on how bad a person needs to sell.
So the appraisal is really an objective opinion of value
and working with a trusted adviser and professional can get you the most money whether you are buying or selling a home. If you want to see what your property is assessed for here are a few links for appraisal districts in the Dallas Area.
Dallas Appraisal District