Want to know the difference between assessed value vs. appraised value? Whether you’re planning to sell, refinance, or simply want to understand your property tax bill better, knowing the difference between assessed value and appraised value is essential. With Houston’s dynamic real estate market, these values can impact everything from your monthly expenses to your home’s marketability.
In this blog post, Houston real estate expert Chris Schmidt and Your Home Sold Guaranteed Realty - Chris Schmidt Team discuss the difference between assessed value and appraised value.
Key Takeaways:
- Assessed value is determined for property tax purposes and often differs from market value.
- Appraised value is used in mortgage lending. It aims to reflect the true market value of a home.
- Understanding both values helps homeowners make informed financial decisions.
- Local market conditions in Houston Heights can significantly impact both values.
What Is Assessed Value vs. Appraised Value?
Understanding Assessed Value
Assessed value is determined by the Harris County Appraisal District specifically for property tax purposes. Chris Schmidt, a leading Houston Heights real estate expert, explains:
“In Houston Heights, assessed values often don’t reflect the true market value of these historic homes, especially after significant renovations or improvements.”
This value is typically lower than market value and is used to calculate your annual property taxes. You should review your home’s assessed value annually, as it directly impacts your tax obligations.
Understanding Appraised Value
Appraised value represents a professional appraiser’s opinion of your home’s fair market value. This value is crucial for mortgage lenders because it provides a more accurate picture of your home’s worth in the current market.
Home buyers get appraisals because they’re required by lenders, but you can also hire a licensed appraiser as a seller to get an accurate home valuation. Schmidt notes,
“In our Houston Heights market, appraised values can vary significantly from neighborhood to neighborhood, based on factors like historical designation, recent renovations, and even specific street location.”
Professional appraisers make their valuations by considering recent comparable sales, property condition, and local market trends. They also visit the home in person to take into account unique features, recent renovations, and other special characteristics.
Key Differences Between Assessed Value vs. Appraised Value
The three main differences between assessed value vs. appraised value include:
- Purpose and Use: Assessed value primarily serves tax purposes, while appraised value is used for mortgage lending and real estate transactions. The assessment process follows local government guidelines, whereas appraisals adhere to strict professional standards.
- Timing and Updates: The Harris County Appraisal District typically updates assessed values annually, but appraised values are determined when needed for specific transactions like home sales or refinancing.
- Professional Standards: Licensed appraisers must follow specific guidelines and maintain professional certifications, while tax assessors work within government frameworks and local regulations.
Understanding the differences between these values affects Houston Heights homeowners in several ways. First, understanding assessed value can help you know how your property taxes are calculated. Your home’s assessed value directly influences your annual property tax bill. As a homeowner, you should understand your right to protest your assessed value if you believe it’s incorrect.
Understanding appraised value, on the other hand, is important if you plan to sell your home or refinance it. Appraised value plays a crucial role in either of these decisions.
Both values can also impact financial planning, from budgeting for property taxes to determining how much equity you have available for home improvement loans.
What Factors Affect Assessed vs. Appraised Value?
Houston Heights’ unique market characteristics affect both assessed and appraised values, particularly, its historic district designation. Recent sales in the area also influence both values, but appraisers typically respond more quickly to market changes than tax assessors.
In addition, home improvements can affect appraised value immediately, but might not be reflected in assessed value until the next tax cycle.
Remember that both values serve different purposes and are determined through different processes. While assessed value helps local governments determine property taxes, appraised value provides a more current reflection of your home’s market worth.
In Houston Heights‘ unique market, working with experienced local professionals who understand these distinctions can help you make informed real estate decisions.
We Can Help You Find the Value of Your Houston Home
Working with a professional is the best way to find out how much your home is worth. At Your Home Sold Guaranteed Realty - Chris Schmidt Team, Chris Schmidt and our team have years of experience working in the Houston metropolitan area.
Our familiarity with the local market trends, as well as our legendary customer service, are why we’ve developed a reputation as the best realtor in Houston. We can easily help you find the value of your home, and if you decide you want to sell it, our unique Guaranteed Sale Program protects your interests and ensures a risk-free sale.
To get started with a home valuation with our team, give us a call at 713-322-5604. You can also fill out the form on this page or send a message to [javascript protected email address].
To Discuss Your Home Sale or Purchase, Call or Text Today and Start Packing!
Yes, improvements can affect assessed and appraised values differently. While both values may increase due to improvements, the appraised value is more likely to immediately reflect the full value of the improvements as it aims to capture current market value. Assessed values may not fully reflect improvements until the next assessment cycle. Some jurisdictions limit on how much the assessed value can increase annually, even with improvements.