What’s The Difference Between Assessed Value And Market Value?

Two terms that you may have heard when talking about real estate is fair market value and assessed value. These two terms are not the same or even interchangeable terms. 

The assessed value of a home can often be higher than the price the house is being sold. These properties can often be seen as a “bargain” in the real estate community. The problem is that this is often a red flag. The property may be overassessed by the town which means the taxes are higher than necessary. 

Homes can also be listed at a higher price than the assessed value. Contrary to popular belief, a low evaluated cost doesn’t mean that the value of the home is less than the asking price. The asking sale price for a property is based on many factors, none of which are what the town deems the property is worth. 

Fair Market Value

Fair market value is what a buyer is willing to pay with no outside influence. As a homeowner, the best way to determine the fair market value of your home is to look at what’s real estate agents call a “Comparative Market Analysis” or CMA. The agent will look at similar properties in the area that have recently sold- generally within the last six months. This analysis will often include things that the assessor doesn’t take into account when pricing a home.

The Appraisal

When you buy a home, and the appraisal is done for the lender when the buyer is obtaining a mortgage, the purpose is specific. The lender is protecting themselves and the buyer. The lender wants to be sure that the property they are lending money on has a value greater than or equal to the purchase price of the home. Appraisals are also done in this manner when homeowners are refinancing the house. 

Challenging Assessed Values

Often, homeowners will buy a property and then later challenge the assessed value of a home for tax purposes especially if the owner feels that the assessed value is worlds apart from the fair market value of the home. If you believe that the assessed value is out of sync with the fair market value of the house and out of line based on the values of another home in the town, you need to file what’s called a tax abatement. Your city or town hall has all of the necessary information for submitting these forms. From there, each city and town has their own timelines for how long the tax assessor has to address this.                  

3 Financial real estate terms you should know

The more real estate terms you understand, the more comfortable you will be in your home buying process. This is especially true for financial vocabulary related to real estate transactions.

To help familiarize you with some of these important concepts, here is a quick guide to financial real estate terms:

Fixed rate mortgage

A fixed rate mortgage is one of the many types of mortgage loan available to prospective buyers. A fixed rate mortgage is a loan that maintains the same interest rate throughout the entire term of the loan.

This means the interest rate won’t fluctuate with market conditions, and won’t increase or decrease over time. A fixed rate mortgage is beneficial for homeowners who want to know exactly how much their monthly mortgage payment will be.

Down payment

The down payment is the amount of money paid upfront to a mortgage lender to buy a home. The amount of the down payment can affect things like interest rates and the total amount of the mortgage loan.

For instance, a large down payment means you borrow less money, and therefore pay more upfront rather than more overtime in interest.

Fair market value

Fair market value refers to the variable value of a property based on market conditions. A real estate agent can help you find the fair market value of a home by conducting a comparative analysis of similar properties in the same area.

Some of the factors that can impact market value include curb appeal, square footage, energy efficiency and overall condition of the property.

These are just a few examples of real estate terms that can help you in a real estate transaction. By learning the language real estate agents use, the more confident you will feel on the search for your dream home.

Which Home Improvement Projects Add Value to Your Home?

Home improvement projects not only help you personalize your space to suit your style, but they can also boost your property value. When you are investing in a home improvement project, it’s important to choose one that is going to allow you to enjoy the greatest return on your investment.

These home improvement projects typically add the most value to your home:

Kitchen Remodel

A kitchen remodel is one of the most costly home improvement projects that you can take on, especially if you decide to renovate your kitchen from the ground up. However, this is also one of the most valuable investments that you can make in your home. A renovated kitchen can provide you with anywhere from a 50 to 80 percent return on your investment, depending on the choices that you make and the amount of money that you invest in the project.


New Windows

Installing new windows in your home is an improvement project that will increase your quality of life inside your home while also ensuring you enjoy a generous return on your investment when you go to sell. It is important to opt for energy-efficient windows to get the most cost savings and see the highest returns. Don’t forget about the rebates and tax credits you may be eligible for when you invest in energy-efficient windows.

Improved Deck or Patio

When you make a commitment to improve your outdoor living space, you are investing in your own enjoyment of your home. However, a freshly painted deck or a new patio can also add a lot of value — either project can offer a 30 percent to 60 percent return on your investment.

Basement Refinishing

Finishing the basement in your home can transform this storage area into a new, functional living space. If you add luxury features, such as a full bathroom or a wet bar, you may find that you see an even larger return on your investment from this project.

Any home improvement project — regardless of its size or scope — is going to require an investment of your time, energy and financial resources. When you select value-added home improvement projects, you may find that your investment pays off in dividends when you list your home on the market for the highest possible price.