As a homeseller in North Carolina, you will face two figures when selling your property: the market value and the assessed value. Often, these numbers can cause confusion because, though they seem to mean the same thing, they aren’t equal. Which is the real value of your property?
Before you find out, you’ll have to keep something in mind: the prices of properties aren’t set in stone. They rise and fall based on several factors, like economic growth, interest rates, and supply and demand. As such, the value of your house will likely change over the years.
Should you decide to sell your North Carolina home now, there’s only one figure that matters: the price that the buyer and seller agree upon. That figure is largely affected by the market value and assessed value of your home.
Market Value: What the Market Says
The market value is how much your house is currently worth in the North Carolina property market. It is the most probable price tag that your house can fetch in an open market transaction.
Who pegs the market value of the home? Real estate agents look at different factors to come up with a figure, including:
- Location – Properties in different locations in North Carolina have different average market values.
- Property Exteriors – The curb appeal, landscaping, and lot size play a significant role in how a house is priced.
- Property Interiors – The construction, from square footage and number of rooms to the heating and cooling systems, also affect the house’s market value.
- Comparables – The prices that the houses in the area have sold for also affect the possible price tag your home.
The goal of the market value is to determine what buyers would be likely to pay for your home.
Assessed Value: What the Taxman Says
The assessed value is the value of a property that determines the property taxes. This is calculated based on the market value and a predetermined ratio.
Who calculates the assessed value of your property? Most counties employ an assessor to place a value on the real estate to levy property taxes on it. The assessor looks to the market value and reviews what similar properties are selling for, factors in recent improvements to the home being sold, and also takes note of the income the property might be generating.
Then, he or she deducts any tax exemptions that you qualify for. The assessor will then multiply the number by an “assessment rate,” also known as an “assessment ratio,” which falls somewhere between 80% and 90%, depending on your tax jurisdiction.
For instance, if the market value of your home is $100,000, and the assessment rate is 80%, then the taxable value of your home is $80,000. This figure will be used to calculate your property tax bill.
Remember, the goal of the assessed value is to measure applicable taxes, so don’t be upset if the assessed value isn’t as high as you hoped it would be. In fact, a lower assessment means a lower tax bill.
Which Price Tag Matters?
Both the market and the assessed value of the home affects the asking price of the home. Your asking price should fall within the ballpark of the market value. Moreover, buyers can look into assessed values — which are contained in public documents — and justify a lower price.
At the end of the day, however, the price of your property is the amount that the seller is willing to sell and the buyer is willing to pay for.
Offer Hut, for instance, will give you a fair and reasonable offer based on the current market value and assessed value of your home. We can provide a no-obligation offer within 24 hours! Get in touch with our team today.