Assessed value

• The assessed value of a home refers to the value assigned to the property on the local tax assessor's rolls. The tax assessor is a government agency that determines the value of property for property tax purposes. A higher assessed value typically means any value-based property tax on that home will be higher than on another home that has a lower assessed value. (A property tax also might be a straight per-parcel assessment not based on value.) Assessors typically reassess home values periodically, though these reassessments may not necessarily occur on an annual basis.
  
  

Market value

• The term "market value" of a home refers to the current value of the home if it were to be sold to a ready, willing and able buyer in an arm's length transaction (i.e., not at a discount to, say, a close relative). Market value typically assumes that the home is not being sold at a so-called "distressed" or "fire-sale" type of price, which might occur, for example, if the home were in foreclosure. A number of websites offer estimates of home market values that are based on data compiled from recent home sales in the area, but these estimates, which are generated by computer algorithms, are often wildly inaccurate.
  
  

Other valuations

• Homes are also subject to other valuations. Two examples are "appraised value," which refers to the unbiased opinion of a qualified and licensed real estate appraiser and "insured value," which refers to the amount of property insurance coverage that the owner has obtained on the home. Appraised value, assessed value, market value and insured value may be similar or different.
  
  

Confusion of valuations

• Home buyers and sellers should not confuse the terms "assessed value" and "market value." Just because a home is being sold for less than the assessed value doesn't mean it's a good deal for the buyer and a bad deal for the seller because the assessed value may be inflated relative to market value. Similarly, a home that's being sold for more than the assessed value doesn't mean it's a good deal for the seller and a bad deal for the buyer because the assessed value may be outdated relative to current market value.
  
  

Trailing valuations

• Assessed values are typically somewhat outdated relative to market value, which shifts from day to day, because the assessed value is only as good as the date when the property tax assessor most recently reviewed the value of the home.