1 Answers
DesertBreeze
Updated:23/07/2024
The difference between market value and appraised value is crucial in real estate transactions.
Definition
- Market Value: The price that a buyer is willing to pay for a property in a competitive market.
- Appraised Value: The value determined by a licensed appraiser based on a set of criteria, typically used for financing.
Key Differences
| Aspect | Market Value | Appraised Value |
|---|---|---|
| Definition | Price in the open market | Value assigned by a professional |
| Determining Factors | Supply and demand | Comparative sales, property condition, location, and improvements |
| Purpose | Buy/Sell transactions | Financing, tax assessment |
| Variability | Changes with market conditions | May be stable unless updated |
Factors Affecting Market Value
- Location
- Economic conditions
- Property condition
- Market trends
- Interest rates
Factors Affecting Appraised Value
- Property size and layout
- Quality of construction
- Comparable sales analysis
- Property improvements
- Neighborhood characteristics
Graphical Representation
Simple Mind Map:
- Value Types
- Market Value
- Appraised Value
- Factors Influencing Their Values
- Supply and Demand
- Property Condition
Conclusion
Understanding the distinction between market value and appraised value is essential for making informed real estate decisions.
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