Appraised vs. Assessed Values

[Kim Hawkinson]

I was just wondering what the difference was between appraised values and assessed values on a property. I'm looking at a certain property on the assessor's website and I just want to make sure that what the seller is asking for isn't too much. Thanks for any help on the matter :D

[Bill Patterson]

Hi Kim! Assessed value is a value placed on the property for tax assessing purposes and here in Michigan is set at 50% of market value. The problem is that it is based on old data and usually lags by at least a year as far as value goes. Also, the reliability of that value is often challenged, since most of the time each individual home is not evaluated, but neighborhoods are looked at in general.

When an appraiser does an appraisal, they use current comparable properties sales data to come up with a value. Also, when appraising multi-family income producing property, they will factor in replacement cost and income.
The key thing here is that the data is usually much more current and the appraisal is specifically on the subject home.

Bottom line....the assessor's value is a guideline, an appraised value is what the lender will depend on and you will need to run your own numbers to see if it will work for an investment for you! You are on the right real estate site to help with that determination!
Bill