If you ever heard these terms and thought these were interchangeable synonyms, you may want to think again.
A property’s appraised value is an impartial value assigned to a property by a licensed appraiser. When determining an appraised value, an appraiser will look at specific details of the subject property, the surrounding area and similar homes to the subject property that have recently sold. If a buyer is purchasing a home, the mortgage lender will require an appraisal to confirm the price a buyer is paying is a fair amount.
Assessed value is the value that a municipality gives property for tax purposes. This doesn’t affect what your home is worth and ideally, you want this amount to be as low as possible since the lower the assessed value is, the lower your taxes will be. The yearly property tax is calculated by multiplying the assessed value by the town’s mill rate then dividing that amount by 1000.
Market value is the agreed-upon amount that a real estate buyer is willing to pay for a property and a real estate seller is willing to sell that property for. There are many factors that affect these amounts including the supply of inventory, demand for housing in the area and market interest rates.