What is the Difference Between and Appraisal and an Assessment?

Eric Tallberg

Real estate property values are changing almost daily. Those who wish to buy or sell property must rely on an assay of the value of the property to determine a specific amount of money to offer or demand for a piece of property. The value of a specific property is determined by both an assessment and an appraisal. The two evaluation methods are, however, quite different in their aims and in their undertaking.

Property taxes are levied based on a real estate assessment.
Property taxes are levied based on a real estate assessment.

An assessment is a tool used by a municipal government to determine the average value of a property and is used for levying property taxes in a fair manner. Assessors may be licensed appraisers, but for assessment purposes, no license is actually required. Most of an assessor’s research and findings are taken from public records on a property. Much of the information used in the taxable assessed value of property is out of date, and in some cases, just plain wrong. Property assessments for tax purposes are ordinarily undertaken during specific time periods, with10 years being the average amount of time between assessments.

Appraisals and assessments are important because the value of real estate can change on a daily basis.
Appraisals and assessments are important because the value of real estate can change on a daily basis.

However, if improvements are made to a property, the municipal assessor may visit the property based on, for instance, a review of building permits issued for such improvements. Obviously, the more a property is worth, the higher its assessed value, and the more it’s taxed. Unfortunately, the inaccuracies inherent in the assessment process often mean that properties are over or undervalued, leading to tax iniquities that are difficult and often expensive to resolve.

An appraisal, on the other hand, is a far more detailed examination of the physical property itself. This examination is undertaken by a licensed, professional appraiser who will very often make sketches of, take pictures of, and write a detailed list of both good and bad aspects of the property. An appraisal will take place at any time when requested by either, or usually both, the buyer and seller of a property.

Because the appraisal of property is so much more comprehensive and timely than is an assessment, lenders are essentially required to use the results of an appraisal to write amounts and terms of a mortgage loan. An appraisal value may, very often be requested by a property seller, as well. The seller can thereby gain an idea of how much money would be reasonable to ask for the property. Without doubt the most accurate and current determination of the value of a piece of property for buyer and seller is an appraisal.

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Discussion Comments


Latte31-I know that this is why short sales are difficult real estate transactions because they can take about six weeks in order to get word from the bank and usually they reject the offer.

These transactions can take months and often the buyer is still left without a home.

I think that it is better to deal with a foreclosure instead of a short sale because the home already went through the cycle and the banks are more likely to negotiate with you.

Sometimes you can do an online home appraisal report by looking at sites like zillow. Zillow gives you a comparative analysis of the neighborhood and an appraisal on a specific home along with the appraisal range. These home appraisal values give you an idea of what the property is worth.

It also offers information regarding what the previous owner paid and the taxes on the home.

I think that some home appraisal tips include making small cosmetic changes like paint and staging. These can have a positive effect on the market value of the home. Pressure cleaning and landscaping also addes additional value.


A home appraisal is often done when you either want to purchase a home or will be refinancing your current home.

Because the banks have to know the value of the property in order to determine the risk associated with the loan as well as the financial requirements that will be associated with such a loan.

Sometimes especially in markets with a high degree of foreclosures, a bank might order a BPO or a Broker Price Opinion which works like a home appraisal estimate.

This usually occurs when a homeowner is underwater in their current property and wants to do a short sale.

A short sale occurs when the mortgage balance exceeds what the market value of the home is. A realtor will then do a BPO or a Broker Price Opinion which will allow the home to be listed for a more marketable price.

Banks sometimes reject these broker price opinions in order to seek more money from the homeowner.

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