Appraisal Vs. Assessment: What is the difference?

There is a difference between “appraisals” and “assessments” although the words are commonly used interchangeably. A educated consumer knows the differences:


  • Completed using an automated valuation program.
  • Generally done once per year.
  • Used to determine real estate taxes.
  • Should be within a margin of error of +/- 10%.


  • Done by licensed appraiser who looks at the home, and comps.
  • Values property “real time” (as of the date of the report).
  • Used to support sales prices or loan amounts.
  • Should be as close to Fair Market Value as possible.

Fair Market Value is what a willing buyer will pay for a property of a willing seller in an arms length transaction. Fair Market Value is determined SOLELY by the buyer and seller, and will be reflective of the market conditions. If a seller is stuck on obtaining an unrealistic price for their property, it will not sell. If a buyer is stuck on purchasing below reasonable values for the market conditions, then he will not buy. When these two parties meet in the middle they will find Fair Market Value, and each will accomplish his goals.

Appraisals are often part of the sales process, but usually after a price has been agreed to between buyer and seller… appraisals attempt to support the price of the purchase so that financing can be obtained.  Assessments are not part of the equation, except when the purchaser attempts to estimate his costs to own the home, and he is determining the taxes due for the property.

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