We understand how frustrating it can be to search for a home in Austin. Half the battle is learning the key terms and what they mean in regards to Texas real estate. So each week we bring you Key Term Tuesday – our way of helping you decode the industry jargon that keeps you from owning your home search.
Today’s key term Tuesday is actually a double bonus. The assessed value and appraised value are often confused so we are explaining the difference to help you understand what they mean for you.
What is Assessed Value?
The assessed value is the value associated with your house for property tax purposes. This value is determined by the appraisal district and, because Texas is a non-disclosure state, the number is the best guess by that office of what they think your property is worth. Values are assessed once per year and are used to calculate the amount of property taxes due.
What is Appraised Value?
The appraised value of a property is based on current market conditions and recent sales data and is what a residential appraiser deems the property to be worth on the day of the appraisal. It is generally used for real estate sale purposes, usually to justify the agreed upon contract price. A lender will lend a certain percentage of the contract price or the appraised value, whichever is less. Lenders do not look at assessed value to determine value, only appraised value.
What’s the Bottom Line?
Ideally you want a home that has a low assessed value (for property tax purposes) and a high appraised value. That would be the combination that is most financially beneficial to a home buyer.
Looking for a Real Estate Expert?
Our team has a combined 55+ years of experience helping home buyers understand the r. Check out our approach to Buying a Home in Austin to learn more about our team and how we work. Then, call us at (512) 827-8323 or email us at info@11OaksRealty.com to schedule a no obligation consultation.