What is assessed value vs. appraised value? When buying or selling a home in Colorado Springs, navigating terms like “assessed value” and “appraised value” can be confusing. Both serve different purposes and are calculated using distinct methods. Misinterpreting them might lead to issues in pricing, taxes, or negotiations. 

In this blog post, Colorado Springs real estate expert Barb Schlinker and the professionals at Your Home Sold Guaranteed Realty - Barb Has the Buyers Team will discuss the difference between assessed value vs. appraised value.

Key Takeaways:

• Assessed value determines your property taxes and is usually lower than market value.  
• Appraised value reflects the current market value of your home and is often used during real estate transactions.  
• Knowing the difference between both forms of valuations is essential for accurate budgeting and understanding your property’s worth.  

What is Assessed Value vs. Appraised Value?

Understanding Assessed Value

Assessed value is calculated by local or state tax authorities to determine how much you pay in property taxes. It’s typically derived from a percentage of the property’s market value, adjusted based on local tax rates and government regulations.

Colorado tax assessors re-evaluate properties every two years, often relying on mass appraisal methods rather than individual property evaluations.

Key characteristics of assessed value include:  

• Purpose: Solely for calculating property taxes.  
• Lower Valuation: Assessed values are often lower than appraised values to prevent overburdening homeowners with taxes.  
• Update Frequency: Property assessments occur less frequently, meaning the assessed value might not reflect current market trends.  

Colorado Springs real estate expert Barb Schlinker notes,

“Many homeowners are surprised to see a gap between the assessed and appraised values, but this difference is intentional to manage tax burdens effectively.”

Understanding Appraised Value

Appraised value estimates how much a home is worth and is determined by a licensed appraiser. This valuation considers various factors, such as the property’s condition, location, size, and recent comparable sales in the area. Unlike assessed value, an appraisal provides a snapshot of the current market.

Key attributes of appraised value include:  

• Purpose: Used primarily for real estate transactions, including mortgage approvals and home sales.  
• Calculation Process: Appraisers perform detailed inspections and analyze local real estate trends.  
• Market Accuracy: Appraised value attempts to reflect the property’s actual market worth.  

Barb Schlinker explains,

“An appraised value is crucial for buyers and sellers to make informed decisions. It ensures properties are priced fairly based on recent market data and property specifics.”

How Can You Use Assessed and Appraised Values Effectively?

Assessed and appraised valuations serve distinct purposes. Knowing when and how to use each can make a significant difference in your financial planning and property decisions:

• Property Taxes: The assessed value is your go-to figure. Since it’s specifically designed to determine how much you owe in taxes, this value is essential for budgeting annual tax payments. If you feel your property taxes are too high, you might have grounds to appeal the assessed value. Research local tax laws and consult with an expert if needed.
• Real Estate Transactions: The appraised value is critical when buying, selling, or refinancing a home. Buyers and sellers can use this number to set fair market prices, while lenders rely on it to ensure the property’s worth aligns with the loan amount.
• Financial Planning: Both values can be helpful. Knowing your assessed value helps you anticipate ongoing tax obligations, while the appraised value provides insights into your property’s equity and resale potential.
• Contesting Values: If there’s a significant disparity between what you believe your property is worth and its assessed or appraised value, you can take steps to address it. Appeal incorrect tax assessments with your local tax authority or request a new appraisal for up-to-date market insights.

Barb Schlinker advises,

“Understanding how these values impact your finances is one of the best tools homeowners and buyers can use to make confident decisions.”

How Do Both Valuations Affect You?

Understanding these values can impact your finances significantly. If you’re a seller, knowing your appraised value helps you price your Colorado Springs home competitively. For buyers, appraisals ensure you’re not overpaying. Meanwhile, the assessed value affects your property tax bills, which can fluctuate based on reassessments.

By understanding how these values are calculated and their respective purposes, you can make informed decisions whether you’re buying, selling, or simply managing your property.

Find the Market Value of Your Colorado Springs Home with Barb Schlinker

Barb Schlinker brings exceptional expertise to Colorado Springs real estate value assessment:

• Decades of local market experience as a Navy veteran turned real estate expert
• Weekly radio show host sharing valuable market insights
• Track record of selling homes for 100% of listing price or more
• Comprehensive understanding of military relocation needs
• Deep knowledge of neighborhood-specific value factors across Colorado Springs

Guarantees and Commitments

Working with Barb provides peace of mind through exclusive guarantees:

• Your Home Sold in Your Time Frame or She’ll Pay You $1,000
• VIP Buyer Satisfaction Guarantee
• Seller Cancellation Guarantee
• 24-Hour Cash Offer Guarantee

Call Barb for Expert Price Analysis

Contact Barb Schlinker at 719-301-1802 for a professional evaluation today. Her expert analysis will help you understand the true value of any property you’re considering and ensure you make an informed investment decision.

To Discuss Your Home Sale or Purchase, Call or Text Today and Start Packing!