What Assessed Value and Market Value Means In a San Diego Sale

Whether buying or selling San Diego real estate, the value of the property is an important factor. There are two values that are typically talked about during a real estate sale: the assessed value and the market value. These two values are different in the way they are calculated and how they can be used. Each is important for a San Diego real estate sale, but many first-time property owners do not know the difference.

Market Value of Property

The market value of the property is an estimate of what the property may be sold and purchased for. It is the amount that would be reasonable for a buyer to offer and for a seller to accept. There are many factors that go into calculating the market value of a property as seen below.

The quality of the home is taken into consideration. Landscaping is important. This includes the outside of the home, size of the yard, what type of home it is, and even what utilities the property uses.  

When it comes to the Inside of the San Diego home, factors like the number of rooms and how large they are, as well as what condition the house and fixtures are in play a role. What systems are installed and if they are well maintained will also be looked at.  

Factors that do not pertain directly to the San Diego property include what other homes are being sold. The quality and value of these homes will be compared to the property. It is important to know how many buyers or sellers are in the area as well. The last factor is where the house is located, which factor in the neighborhood and amenities.

Once the market value is calculated, it can be easier for a San Diego seller to put an accurate asking price on the property. The buyers that come to view the home will use their own real estate agent to determine if the price fits the market value.  

Assessed Value of Property

The assessed value of a property greatly depends on who is assessing it and where the property is located. The assessed value of a property is typically calculated when the county is evaluating what to charge for property taxes. An assessor is sent to the property to determine its worth.  

They will look at similar properties in the neighborhood, any renovations that have been recently completed, and what it would take to replace the entire property. If the property is a rental, the assessor may factor in how much is being charged to the renters.

A value is calculated and then an assessment rate is applied. This rate can vary from location to location. Most of the time the assessment rate is eighty to ninety percent. This causes the assessed value of a San Diego property to often be lower than the market value of the property.

The assessed value of the property is used to calculate how much a San Diego homeowner will pay in property taxes. The higher the value, the more the owner will pay. Increasing the value of a property through extensive renovations will cause a person’s taxes to increase.

How to Use The Market Value and Assessed Value

The market value of a property can change greatly and quickly. However, most areas do not calculate the assessed value as frequently. Some areas have stipulations that say the assessed value of a property cannot change more than a certain percentage a year, regardless of the actual assessment.  

An assessed value is typically not something to concentrate on when selling or buying a San Diego house. Its main focus is to calculate what the taxes on the property will be. The market value is much more applicable to a buyer or seller.  

A buyer or seller may use the assessed value of the home to counter-offer. If the assessed value is far too high or too low for an offer, the buyer or seller can use it as a jumping off point to discuss a different price. While the assessed value is typically lower than the market value, it can be helpful in determining an estimated price in which the property can be sold for.  

The value of a property depends on when it is assessed. There is no one value that can be attached to a property. Since the San Diego real estate market is always changing, the value of properties will continually change as well. Using the market value and assessed value of a property can determine the value of the home at that given moment in the current market.