Assessment Vs Appraisal - What Will Be the Best for a Real Estate Agent?

In the real estate world, the terms “assessments” and “appraisals” are frequently confused. Each of these methods of property valuation will help determine its market value at that particular moment in time. However, there are some distinct differences. The basic difference is that an assessment is utilized to figure out that taxation rate of the property. An appraisal is utilized to determine the overall value of the property when financing on it is needed. We will explain each term in a little more detail in this article.

Each town or city has a professional assessing team whose function it is to assess the value of a person’s property. They do this by personally viewing each property and interviewing the owner. The purpose of this is to determine how much tax is owed on that property and is usually based on the combined assessed value of all properties in the city or town. When the assessed rate of a city or town’s combined properties becomes too outdated, the team will once again proceed with the necessary procedures.In economic times of declining property values and increasing property assessments it is important to fully understand what your ASSESSED value is. Not doing so correctly could mean you will wind up in front of a local property board in order to appeal it. It is probably beneficial to have a lawyer and/or your tax advisor review your assessment report if you have any concerns about it.

“An appraisal is a report done by an appraiser to determine VALUE.” He or she will do that by comparing the property’s value to other similar properties in your community and of the same type. This procedure is known as the market approach. Typically, the appraiser will combine this with a second procedure called cost approach. The cost approach takes into account the cost it would incur to rebuild the property. OR instead, they can use (as a second procedure) an income approach which is used on properties that create an income stream. Most often appraisals are done when some type of financing on it is required; however there are additional reasons someone can have a home or property appraised. The ultimate value of a specific appraisal is a result of current market activity as well as the condition of the property at that point in time.

However; there are benefits of having BOTH an assessment AND an appraisal done on your property. The combination of these procedures will give you a great idea of what your property is worth. This information is essential if you plan to sell the property or obtain any type of financing for it. Additionally, you can use an APPRAISAL value in order to help with an ASSESSMENT value if you do wind up in a situation where you have to appeal it. Again; before taking any action, consult your attorney and/or your accountant.

Assessment Vs Appraisal - What Will Be the Best for a Real Estate Agent?