For the many years that I have been in real estate, I have fought consistent battles against “Real” value vs implied value, or assessed value. Here is what an appraisal is without definitional lingo.. It is a snapshot of the value of your house derived from comparable sales within the last year in your immediate area. Got That? Comparable means similar in size, beds, baths, etc, similar amenities, similar in age or “effective age” and close to your neighborhood. If you live in a middle class average neighborhood, compare to the millionaires row next door or the crack head heaven down the street won’t cut it. Foreclosures and “fire sale” or distressed sales? Not a comparable. Appraisers that disagree with me.. you are a disgrace to the business and I warn all homeowners of you… you cause major damage to the economy! The comparable must be what are referred to as “arms length transactions”. Are licensed real estate agents appraisers? No they are not. They can however be an excellent guage as to the potential marketability of your house and where you should price it to be competitive.

Here’s where it gets interesting. There are many online companies that promise a value of your home. Bogus. They are a decent guesstimate, but other than that.. bogus. Here’s the funny part though….  A lot of investors go to homeowners, whether it be in a buy or sell situation, armed with proof of the value of the home. This proof comes from the county or city tax records! First of all the tax records is ZERO indication of your properties’ worth. It simply is a reflection of “assessed” values by section or segment of the community that your house happens to fall within. It’s solely a number created for a tax basis. Everyday people argue their values to raise them, or lower them. Look at some of the ultra-rich multi million dollar homes. They will always be assessed as low as possible, as they know the true value of their home, but just don’t wish to pay the absurd taxes attached to that. When an investor tells you THEY know the value of your house… laugh in their face! When documented value becomes important in the transaction, you must get a reputable third party appraiser to do the valuation.