When it’s time to sell your Chicago home, there can be some confusion when determining the value. If you REALLY want to know what it is worth, you can pay to have an appraisal done. An agent should be able to provide you with detailed CMA reports, letting you know what is going on in your neighborhood. Knowing the differences in these home values can set you set your ideal asking price!
What is Market Value vs Assessed Value in Chicago
Market Value by Definition:
According to Fannie Mae, “Market value is the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.”
In other words, the market value is the price you would expect the property to sell for when professionally marketed over the course of several months after you have found the right buyer for the house. However, it is important to understand that the market value is simply a suggested value you may expect to sell the property for and by no means is a 100% accurate estimate as the free market will ultimately decide the value of the property.
Assessed Value by Definition:
According to Investopedia, “An assessed value is the dollar value assigned to a property to measure applicable taxes. Assessed valuation determines the value of a residence for tax purposes and takes comparable home sales and inspections into consideration.”
Understanding assessed value can be a bit confusing. County property accessors give values to homes for tax purposes, however, these values are not reflective of changes in market value. The difference between the assessed value and the market value is known as the equalization rate. This rate is used by the county to figure your actual property value.
Generally speaking, the assessed value of the property is the least reliable value indication for your property since its intended use is for the calculation of our property taxes. There are many inconsistencies for determining the assessed value from county to county that makes this number not even a consideration for a professional property valuation report.
Appraised Value:
But wait, there’s more. Your appraised value can differ from both of these. An appraisal is done by a licensed professional who rigorously checks all aspects of the home. While many homeowners consider an appraisal to be a 100% accurate valuation method, the truth is that they aren’t always exactly right either. In some cases, appraisals are very inaccurate. Overall appraisals may be a good additional opinion to the suggested value of your property but not considered an absolute prediction of value. they might be 100% correct, this is still the opinion of one. Whereas other methods are mathematically calculated based off of your home’s history and market conditions.
What The Internet Has To Say About It:
The large real estate sites have their own formulas for determining property values. These values are broad, and based on market conditions and information entered by users on the site directly. They do not always accurately reflect YOUR home personally. Think of it as Kelly Blue Book for cars. It is a close guess but determining what the ACTUAL market value can be much different. People report seeing these numbers off by $20k, $50k and even more!
What it Means For You As A Seller:
Do your homework! Make sure you have all the numbers listed above and understand terms such as the equalization ratio and fair market value. Make sure you are working with a true professional who can help you to accurately determine the market value of your home.
Setting a great asking price is critical. You do not want to set it too high and have to repeatedly lower it to get buyers in the door. Your pricing history is public information, and repeatedly lowering your price can make buyers think there is something wrong with it. And for obvious reasons, you don’t want to set your asking price too low. To get the price you want you must exercise patience and make sure you are working with a true professional in Chicago.