Assessed Value vs. Appraised Value

What's the difference between assessed and appraised values? Read on to learn more about the role of each in real estate.

Real Estate
June 10, 2023
Assessed Value vs. Appraised Value

Your home’s value is destined to change over time depending on various factors within and outside of your control. For example, a state-of-the-art community event center can be proposed to be built within the bounds of your neighborhood—driving up the property value. Alternatively, a new study showing an increased crime rate in your city may drive your home’s value down. 

As a homeowner, knowing the difference between the assessed value vs. appraised value of your home is crucial to understanding the changes you’re likely to face. 

For many homeowners, differentiating between an appraisal vs. assessment can be challenging. Our guide below will explore the meanings of each term.

What is Assessment Value?

In real estate, an assessment typically refers to a local government's evaluation of property taxes homeowners must pay each year. These taxes serve as the primary revenue source for local governments and fund essential services, such as schools, hospitals, roads, police, and fire departments.

Not all assessments are the same. The assessment on a residential property will likely be different than a commercial one or one for agricultural or religious purposes. Factors like a property’s size, age, and the type of construction used also determine the overall assessed value.

How Do Assessments Work?

Typically, the local governments decide how often they conduct assessments. Some choose to assess property taxes once a year, every three years, or after the property is transferred from one owner to another.

Other local governments may assess a property’s value based on the market, which is determined using an assessment rate. With this method, your home’s value will change along the same trend as the other properties in your neighborhood.

The assessed value of a property may also change if the designated tax authorities change the tax rate used to calculate the taxes. Property tax laws are determined at the local government level, meaning the criteria used to conduct a property assessment may vary from one location to another. 

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What is Appraisal Value?

Appraisals are valuations of a property’s current value and are typically conducted by a designated individual representing a regulatory body. Appraisals tend to be more subjective than assessments because the professional appraiser is looking to determine a property’s fair market value.

An appraisal may be completed for insurance purposes or a property sale. In the case of home appraisals, an appraiser typically evaluates the home’s condition and estimates its value, using similar homes in that area as the standard for the valuation.

How Does an Appraisal Work?

During a home purchase, the appraisal starts after a buyer’s offer is accepted by the seller. The buyer’s mortgage lender then typically requests an appraisal. Here, an appraiser completes a comprehensive internal and external assessment of the home to estimate its value and, ultimately, its price point.

Depending on the appraiser, the type of appraisal, or the home itself, an appraisal can take anywhere from a few minutes to several hours. The appraiser then uses the information gathered from other homes in the vicinity to reasonably estimate the home’s value.

The appraiser then shares the appraisal report with all parties involved, including the home buyer, seller, or mortgage lender.

So, what do home appraisers look for in an appraisal? An appraisal may be based on factors such as:

  • The condition of your home’s structure 
  • Major improvements to your home, such as renovations
  • The number of bedrooms and bathrooms in the home
  • The type of HVAC system installed in the home
  • Upgrades to your built-in appliances

Differences Between Assessments and Appraisals

So, what are the differences between these two values: assessments and appraisals?

The main difference is that assessments are primarily used for tax determination, whereas appraisals help determine a home’s fair market value, typically during a sale. As such, assessments are more frequent than appraisals since local governments collect taxes annually or every few years.

In general, the assessed property value of your home will likely be based on an assessment whereas its appraised value will be determined from an appraisal. However, your home’s appraised value may impact its approved value.

Although both processes are subjective, appraisals tend to have a larger impact on your home’s value because the property appraiser looks closely at the finer improvements you’ve made to the home. On the other hand, assessors are simply there to determine how much taxes you’re required to pay on your home based on similar homes in your neighborhood.

See related: Appraised Value vs. Market Value

Assessment or Appraisal: Which is Right For You?

Ultimately, deciding whether to get an assessment or appraisal on your home will depend on your specific needs. If you want to figure out how much you’ll pay in real property taxes after making improvements or renovations to your home, then an assessment will be helpful.

If you want to sell or refinance your home, then an appraisal is a more ideal option. It will provide your mortgage lender with an accurate picture of your home’s value. 

If you want to tap into your home’s appraised value and unlock the wealth in your home, Truehold can help. With our Sale-Leaseback, you can quickly unlock your home equity while continuing to live in your home after selling.

Discover your home’s true value, and live more comfortably today—with Truehold. 


1. Investopedia. Your Property Tax Assessment: What Does It Mean?

2. Investopedia. Appraisal: Definition, How It Works, and Types of Appraisals.

3. Investopedia. Strategies to Increase Home Appraisal Value.

Lucas Grohn headshot
Written by
Lucas Grohn
Senior Manager of Sales at Truehold - A Thought-Leader in Real Estate
Lucas Grohn brings over a decade of real estate expertise to his role, where he guides a team dedicated to innovative sales strategies. Known for his thought leadership and diverse experience, from managing brokerage operations to training agents at top firms, Lucas covers a broad span of real estate content for Truehold.
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Truehold's blog is committed to delivering timely and pertinent insights in real estate and finance, purely for educational and informational purposes. Crafted by experts, our content is thoroughly reviewed to guarantee its accuracy and dependability. Although designed to enlighten and engage, our articles are not intended as financial advice and should not be the sole basis for financial decisions. Our stringent editorial practices ensure the integrity of our content, empowering our readers with valuable knowledge.

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