Market Value vs Appraised Value: Know the Difference for Your Home

People looking to sell their homes often encounter two terms that both try to convey the value of their house: market value and appraised value. In real estate, these have distinct meanings, and it’s helpful to understand the difference.

When you decide that you want to sell your house, you might use a tool like HomeLight’s Home Value estimator to get a ballpark idea of its market value and how much you could ask for it, or work with a top agent to develop a pricing strategy for putting your home on the market.

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However, if a buyer’s lender orders an appraisal of the property, and the appraised value is lower than the asking price, the deal could fall through.

So, what’s the difference between market value vs. appraised value in real estate? Let’s take a deeper dive into what each term means and how it affects the sales price.

Understanding a home’s market value

The market value of a home is the price buyers are willing to pay for a house, and varies over time depending on prevailing market conditions. It is not the listing price. Michelle Queen, a top real estate agent in Cartersville, Georgia with 19 years of experience, puts it bluntly:  “The market value is what the home is actually worth.”

Factors used to determine the market value of a home

Comparable sales

Comparing sales prices is a big factor in determining a home’s market value. Real estate agents do this by running a comparative market analysis (CMA). “When I’m running house values, I’ll look at what’s sold in the same subdivision or within a mile, and compare prices with properties that are similar to the client’s property,” says Queen, helping her make an educated determination of the home’s market value.



from HomeLight Blog https://www.homelight.com/blog/market-value-vs-appraised-value-real-estate/

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