Your home may be one of your largest and most valuable assets, therefore it is important to know its worth. Homes have many values assigned to them including their assessed, appraised, and current market values. Each of these is calculated by a different source, using different methodologies for different purposes, and therefore can lead to different valuations. Your home’s value is used to determine your property taxes, mortgage refinance rates and home equity loans. Even if you aren’t selling anytime soon, you should understand its value.
The assessed value of your home is used to determine property taxes. It is calculated by the government, and each municipality may use different algorithms, techniques and considerations in their process. This will usually be the lowest value attached to your home, which is not bad, since the lower the amount, the less taxes you pay. Some jurisdictions, such as DC, re-assess each time a home is sold to reflect recent purchase price. It is important for buyers to note that this will result in an increase in tax liability.
If you own a home in DC, you can check a home’s assessed value here.
MD residents should use this link.
In VA, counties have separate websites listing property assessments.
Since your taxes are based on this assessment, it is important for you to understand what it is and how it is calculated by your municipality. If you think your home is being assessed for more than it’s worth, we can help you dispute your tax assessment by providing comparable home values, and hopefully save you tax dollars.
While the assessed value of your home determines what you pay in taxes, the appraised value is used by banks to qualify loans. When refinancing or applying for a home equity loan or a mortgage, the bank will usually require a professional appraiser to determine the home’s value. The appraiser will evaluate recent sales of nearby homes that are similar in square footage, number of bedrooms and bathrooms, building style and age. Many appraisers will do an in-home inspection to verify square footage, condition, and quality of materials. Because appraisals are determined in part by recent sales, appraisals can be tricky in markets where values are rising quickly. When a home receives an offer higher than list price, there is always the concern that it will not appraise. Unfortunately, if an appraiser is not local, he or she may not be aware of area nuances that increase the value of a home. Also, appraisers do not always have the benefit of having inspected comparable properties. For example, a comparable may have sold at a discount because of a poor layout or lack of landscaping. To know that your house has been appraised correctly, you should know its current market value.
The market value of a home is the price at which it will sell under current conditions. A local real estate agent is well positioned to make this assessment. Real estate agents are aware of market trends, the value of location within a neighborhood, have toured comparables, and know what is meaningful to current buyers. When providing an estimate of current market value, an agent will conduct an in-home visit, analyze recent sales data and incorporate your home’s special attributes in the evaluation. A comparative market analysis (CMA) is essential when you are selling your home to determine an appropriate list price. A CMA is also helpful when purchasing a home to ensure that the list price is in-line with current market trends.
If you would like to know the current market value of your home, please contact us for a complimentary comparative market analysis. We know the neighborhood, the market and current trends, and can help you determine what improvements can increase the value of your home.