What is the relationship of a property's assessed and appraised value to its selling price?

Asked by Ann, Hendersonville, NC Fri Oct 17, 2008

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Dana Schuster, Agent, Slidell, LA
Sat Oct 18, 2008
No lending institution will finance a home for more than its appraised value. If the home does not appraise at selling price,the buyer would need to come up with the difference in order to make the purchase.
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Lori Jeltema, Agent, Suffolk, VA
Thu Oct 23, 2008
Ann,

Around here, there is no set relationship. We can have one house on the street assessed for $300 and sell for $350 and the other assessed for $400 and sell for $375. I guess that the only thing you can say is that the appraisal and the tax records look backwards and the listing price should look forward (a bit!). If you have three exact homes that 2 months ago for $500, you pretty much know where your base price starts, then you have condition, etc. If, however, you have two exact homes under contract and they are closing for $40k less than the home you have listed will close because the market is declining, you may have to reduce your price or prep your seller for a surprise come the appraisal. The appraisal will look back at those closing and use those prices of closed sales (and sometimes consider pendings if they can get verification). Remember, an appraisal is just snapshot opinion of the value at that time and probably has a more personalized assessment than the tax rep driving past your home and going by technical records. There are a lot of homes over valued due to the rapidly rising market and there are a lot of people wanting adjustments.
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