Market Value vs. Assessed Value

The market value of a home is the estimated amount buyers are willing to pay for the home on a given market. This price is set based on several factors such as location, outside and inside condition, etc. Your real estate agent will also consider homes that have recently sold in the area to understand the market in your specific neighborhood. They'll also consider improvements that you've made to the property, but the market value focuses greatly on what potential buyers are looking for and willing to pay.

The assessed value is used for tax purposes and typically depends on local municipalities. It is not unusual for the assessed value to be lower than the market value. It is typically based on several factors, including improvements made to the home, any income being made from the home, and more. When the assessment of your home is done, that informs how much you'll pay in property taxes.