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Brandy Loftis, Home Buyer in

whats the difference between a tax appraisal and a real estate purchase appraisal

Asked by Brandy Loftis, Tue Feb 28, 2012

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What follows is the best of my understanding of the 2 types of valuations. Tax values are legislated by states. In NC they can be assessed every 4 years, but must be assessed every 8 years. They are conducted for the purpose of setting the property value to generate revenue to meet county and city budgets. I'm not even sure what value guidelines are used as a benchmark to determine the value. At any rate, in my opinion, the importance of the tax value should be minimal in determining the current market value of a property, and I would be very skeptical of any market value conversations that center around the tax value.

A real estate purchase appraisal is conducted by a private practice licensed appraiser for the purpose of determining the current market value of a particular property at a particular time based on the recent sales in the nearest vicinity to that property. The appraisal serves to indicate whether the purchase price on a contract reflects a deal, a fair market value, or that the negotiated price is more than what similar properties have recently sold for.

Dawn Clayton
828-778-2656 Cell
Broker, Carolina Connections Team
Keller Williams Realty
1 vote Thank Flag Link Wed Jul 18, 2012
A tax appraisal is the basis for the property tax bill on a property. A purchase appraisal is the basis for a lender making a loan on a property.

There are many other differences between the two kinds of appraisal. What exactly are you trying to find out. When I know, I can give you a better answer.
0 votes Thank Flag Link Wed Jul 18, 2012
In today's market, the former is what you wish your property was worth, and the latter is what you can expect somebody to pay for it.
0 votes Thank Flag Link Thu Mar 1, 2012
Tax appraisal is done for tax purpose and real estate appraisal is done to find the market value of the property.
0 votes Thank Flag Link Thu Mar 1, 2012
Tax Appraisal = Done by the City or County Tax Assessor. A "basic" value of a typical home in that zip code with similar square footage of land and improvements (a house or business on the property or vacant land). This is usually done according to recent sales in the area or zip code, but not always. No appraiser usually visits the property. It is sometimes done by a "drive by" or sometimes just by computer maps and documentation of recent sales of nearby properties

Real Estate Purchase Appraisal = Done by your Bank to determine if the house you are buying or refinancing is reasonably worth what the sales price is. This is MUCH more detailed. An actual State Licensed Appraiser goes to the property. Takes measurements. Takes photos and documentation about the condition of the property and the features of the home. Then they do their computer analysis to document recent sales in the area. And they come up with what their opinion is of the Market Value and/or Replacement Value of the property. They give a value to the LAND and a value to the STRUCTURES. Added together, this is what is generally referred to as the "APPRAISED VALUE."

You can imagine, that if one neighbor has just renovated their kitchen and landscaping, and another neighbor has not-- those homes may have the SAME TAX VALUE, but different APPRAISED VALUES.

If this answered your question, give me a "BEST ANSWER" or "THUMBS UP"! That way other readers will know I'm giving good advice. Thanks!
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0 votes Thank Flag Link Thu Mar 1, 2012
Hi Brandy,

I believe you mean tax assessment? The assessment is a value that your local municipality will place on the property for tax purposes. The assessment does not represent actual value although it may be near the actual value. The lender appraisal is what they think the home is worth based on what similar homes in the area are selling for.

Good Luck,
0 votes Thank Flag Link Tue Feb 28, 2012
I assume you mean a tax assessment, This is what the local taxing authorities base their taxes on, comparing you to others in your area so that taxes can be as fair as possible. It may or may not represent market value; it's a relative thing. An appraisal is supposed to represent market value at the time it was done.
0 votes Thank Flag Link Tue Feb 28, 2012
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