Today we’ll be clearing up some misconceptions about what assessments and appraisals are.
An appraisal is ordered by a bank and dictates the value of a property. Done for financing purposes, it’s found by researching comparable property in the area; this is similar to how an agent finds the value of your home. An appraisal is required for a mortgage.
“You have to be careful with appraisals—more times than not, they’re inaccurate.”
Appraisals, which are ordered by the bank, evaluate your property’s market value. What they do is find a ballpark value that is used to calculate your tax basis. Your home is assessed when you buy it, and any future reassessments are based on local area sales.
Somebody once told me appraisals aren’t worth the paper they’re written on, and I’ve seen this to be true. A client of mine had their home appraised at $400,000, but the market showed it was only worth around $325,000 (which is what it later sold for). You have to be careful with appraisals—more often than not, they’re inaccurate.
If you have any questions or need more information, feel free to reach out to us. We look forward to hearing from you soon.