Real estate property values are changing almost daily. Those who wish to buy or sell property must rely on an assay of the value of the property to determine a specific amount of money to offer or demand for a piece of property. The value of a specific property is determined by both an assessment and an appraisal. The two evaluation methods are, however, quite different in their aims and in their undertaking.
An assessment is a tool used by a municipal government to determine the average value of a property and is used for levying property taxes in a fair manner. Assessors may be licensed appraisers, but for assessment purposes, no license is actually required. Most of an assessor’s research and findings are taken from public records on a property. Much of the information used in the taxable assessed value of property is out of date, and in some cases, just plain wrong. Property assessments for tax purposes are ordinarily undertaken during specific time periods, with10 years being the average amount of time between assessments.
However, if improvements are made to a property, the municipal assessor may visit the property based on, for instance, a review of building permits issued for such improvements. Obviously, the more a property is worth, the higher its assessed value, and the more it’s taxed. Unfortunately, the inaccuracies inherent in the assessment process often mean that properties are over or undervalued, leading to tax iniquities that are difficult and often expensive to resolve.
An appraisal, on the other hand, is a far more detailed examination of the physical property itself. This examination is undertaken by a licensed, professional appraiser who will very often make sketches of, take pictures of, and write a detailed list of both good and bad aspects of the property. An appraisal will take place at any time when requested by either, or usually both, the buyer and seller of a property.
Because the appraisal of property is so much more comprehensive and timely than is an assessment, lenders are essentially required to use the results of an appraisal to write amounts and terms of a mortgage loan. An appraisal value may, very often be requested by a property seller, as well. The seller can thereby gain an idea of how much money would be reasonable to ask for the property. Without doubt the most accurate and current determination of the value of a piece of property for buyer and seller is an appraisal.