What Is Appraised Value?

It's an objective opinion of value, but it's not an exact science, so appraisals may differ.

For buying and selling purposes, appraisals are usually based on market value—what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.

Appraisals are performed for lenders, not buyers.  The purpose is to justify the sales price so that the lender feels they are making a solid investment since the property is collateral for the loan.  On appraisals, most weight is given to historical data collected in the last four months. Appraisers try to make allowances, but because they have rules and guidelines to follow, there are times when they cannot - especially in dealing with multiple bidding situations and in areas where there are fewer recent sales. 

Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.  Appraised value doesn't consider special considerations, like the need to sell rapidly.  Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.

Just because you've had an appraisal performed on your home does not necessarily mean that is what the listing price of your home should be.  It is recommended that you obtain a competitive market analysis to compare what similar homes such as yours are selling for in the existing market.  Market value is what price the house will bring at a given point in time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker.  This will enable you to put a better "price tag" on your home to ensure that it sells in today's market.

Remember, you can request a no cost market analysis here.  For additional tips on pricing your home, see  Tips for Pricing Your Home.