What’s the difference between appraised value and market value?
Ryan Haley explains these two terms to help buyers and sellers understand what they really mean.
What Is Appraised Value?
An appraised value is a value that has been computed by a licensed appraiser. They evaluate sold data of comparables that are similar to the subject property that is for sale and/or under contract.
Typically, the sold data could be one month, two months, or three months in the past.
What Is Market Value?
Market value, on the other hand, evaluates what the market is willing to pay for a property. Essentially, this is what a buyer and a seller are willing to agree upon to sell that property. That is a market value.
What did the market drive to get to that number? That is typically done in real time. That is today’s value.
So, the difference between appraised value and market value is an appraised value is done by a licensed appraiser using sold data in the not too distant past, whereas market value is real time—today’s value—and that is determined by buyer and seller and demand in the current marketplace for that particular property.