No one knows the "value" of a home. Multiple “values” are placed on a home by a number of different parties – and they’re all wrong. Not one is truly accurate because influences on real estate values are almost infinite and “value” is never a static figure. Even "purchase value - sale price" is contingent upon variables like timing, inventory, buyer and seller circumstances and more. A home selling for X one day may sell for X + 2 the next day or X - 3 he next week, you just don't know.
Home owners have opinions of value but often little basis for those opinions. There is rarely consistency between assessments, appraisals, AVMs, market value and sale price…simply because the real estate market is one of the most complex entities around. It’s beneficial for owners to have an understanding of the different “values” (loosely used for convenience) placed upon their home so that when the “what is the house worth” question is posed, they have some semblance of accuracy.
Here's a tip - "appraised value" does not mean that is what a home will sell for. Nor does "assessed value" mean that the home is "worth" that. A "Zestimate"? Well that's nothing more than an automated valuation model (AVM) and it generates a "value" by using public records and sales data - about as accurate as tossing a dart at a board from 100 yards. At best a home is worth what a buyer is willing to offer and a seller willing to accept at that certain moment in time. Ten minutes later, things could change...
Hank Miller explains the nuances and things to keep in mind when home values are considered in his article titled Assessments, Appraisals, AVMS, Market Value and Sale Price...Why no one knows the true value of a home. This five minute read will give you a solid understanding of these different approaches to "value" and why none will likely ever agree.
THE HANK MILLER TEAM COUNSELS HOME BUYERS AND SELLERS IN THE ATLANTA AREA WITH OVER 25 YEARS OF SALES AND APPRAISAL EXPERIENCE.
