Do Appraised & Assessed Values Impact Market Value?



What is the difference between assessed and appraised values? How do they impact the market value of your home? I’ll go over everything you need to know today.


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Our VIP client Daniel sent in a great question that I would like to answer today: “What is the difference between assessed and appraised values? Do those values have an impact on the market value of your home?” 

Thanks for your question, Daniel! A $25 gift certificate is coming your way. 

Now, there are three different types of values in real estate: assessed value, appraised value, and market value. 

The assessed value is used by your bureau, county, or municipality to determine your property taxes. The assessor uses common appraisal tactics such as neighborhood drive-bys, recorded sales (although sales price is not on the public record in Alaska—we use voluntary sales information), and property tours. 

In Alaska, you will get a notice in the mail asking you what you paid for the house and what kind of financing you used. This is voluntary information; you don’t need to fill out the form and you don’t need to invite the assessor into your house. However, if you think your assessed value is too high, it can help to have established communication with the tax assessor. 

The assessor takes that value, multiplies it by the mill rate for your area, and subtracts any tax exemptions in order to determine your tax obligation. 

The appraised value comes into play when you finance your home purchase through a mortgage. The lender will hire a third-party appraiser to determine the value of the property. The appraiser is the eyes and ears for the mortgage lender; they mitigate the risk for the lender and justify the contract sales price for the loan. 

Since the Dodd-Frank Act, there have been many changes in this process and a push to make those appraisals more conservative. As a result, appraisals rely more on an equation rather than local market knowledge; that math problem doesn’t always work because you might be comparing apples to oranges. 

The market value of your home is dictated by market conditions like supply and demand and the condition of your home. The market value also depends on your listing agent’s negotiation skills. 

Both the assessed and appraised values have impact on the market value. However, the appraisal has much more bearing on market value, especially since 90% of home sales are financed by a lender. 



The appraised value has more of an impact on your market value.


If an appraisal comes in low, the buyer has the ability and leverage to negotiate the sales price to a lower value. In many cases, the appraisal sets the market value. 

If you have any other questions, send me an email. If I answer your question with a video, you will receive a $25 gift certificate. Please don’t hesitate to reach out to me. I look forward to hearing from you!