Market Value vs. Appraisal Value
What are they and how are they different?
When selling a home, these are the two things that establish the value of your home. The market value is what the buyer thinks the home is worth and the appraisal value is what the appraiser thinks the home is worth.
Appraisers have very strict rules and guidelines on what they go through to establish the value of a home being sold. Their goal is to establish the value of the home to protect the lender’s interest in the home for the new potential buyer. (If they allow a $400,000 loan for a home that is really only worth $300,000, that hurts the buyer AND the lender!)
Market value, on the other hand, is where your Realtor comes in. They help assess that value. These might be things that buyers are interested in but that appraisers are allowed to give little or no monetary value to.
For example, a three car garage is something buyers are very interested in right now. Appraisers can give about $5000 in value for the third car garage, but it is highly desirable to buyers, so not having one can be the difference in selling your home or not.
Another example is location. If you’re on a busy street, fewer buyers will be interested in the home and it will be harder to sell even if an appraiser gives it a fair appraisal price.
This is where having an experienced Realtor comes in handy! Someone who can let you know what adds marketability, or market value, to your home and will let you know what to do to get top dollar when selling your house!
Any questions about this? Comment below!