The Difference Between Assessed Value vs. Market Value
As a homeowner, you’ll encounter two different valuations for your property: the assessed value and the market value. While they both relate to your home’s worth, they are used for very different purposes and are almost never the same number.
Understanding the key difference between these two figures is essential for managing your home finances.
What is Market Value?
The market value of your home is the price it would likely sell for on the open market. It is the amount a willing buyer would pay to a willing seller.
- How it’s determined: Market value is determined by supply and demand, recent sales of comparable properties (“comps”) in your neighborhood, your home’s condition, location, and features.
- Who uses it: Buyers, sellers, and real estate agents use market value to determine a fair price for a home. Your mortgage lender also uses it (via an appraisal) to determine your loan-to-value ratio.
- How it changes: Market value can change rapidly, fluctuating with local market conditions, interest rates, and the time of year.
What is Assessed Value?
The assessed value is a valuation assigned to your property by your local government’s assessor’s office for the sole purpose of calculating your property taxes.
- How it’s determined: The assessor uses a formula to calculate this value, which may be based on recent sales data but is often only updated every few years. In many areas, the assessed value is intentionally set as a percentage (an “assessment ratio”) of the market value.
- Who uses it: Your local government (city, county, school district) is the only entity that uses this value to determine how much you owe in property taxes.
- How it changes: Assessed value changes infrequently, typically only when there is a county-wide reassessment or after you make significant improvements to your home that require a permit.
The Key Takeaway
Market Value is for buying and selling. Assessed Value is for taxing. Don’t be alarmed if your assessed value is significantly lower than what you believe your home is worth; this is normal and often works in your favor by keeping your tax bill lower.
Why Domidocs is the Best Way to Track Both Values
A smart homeowner keeps track of both their market value and their assessed value. Domidocs is the only platform that allows you to see both of these critical numbers in one place.
1. Track Your Market Value in Real-Time
The Domidocs Home Equity and Value Tracker provides you with an up-to-date estimate of your home’s current market value. This is essential for understanding your net worth, making decisions about selling or refinancing, and knowing if your assessed value is fair.
2. Store Your Assessed Value Securely
The Domidocs secure digital vault is the perfect place to store your official assessment notice from the government. This creates a permanent digital record of your home’s assessed value and tax history.
By having your dynamic market value and your official assessed value in one dashboard, Domidocs gives you a complete and powerful financial picture of your most important asset.
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