When it comes time to sell your home in Chicago, accurately determining its value can be crucial for a successful sale. Understanding the various methods of valuation—such as market value vs assessed value, and appraised value—can help you set an ideal asking price and navigate the selling process effectively.
What is Market Value vs Assessed Value in Chicago
Market Value by Definition:
According to Fannie Mae, market value is defined as “the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.” In simpler terms, it represents the price your home is likely to fetch if it remains on the market for a reasonable period, with interested buyers viewing it regularly.
Assessed Value by Definition:
Assessed value, on the other hand, is the dollar value assigned to your property by county assessors for the purpose of calculating property taxes. This value is based on factors like comparable home sales and property inspections conducted by the county. It’s important to note that assessed value may not always align with current market conditions or recent changes in your property’s value. The disparity between assessed value and market value is often referred to as the equalization rate, which counties use to adjust assessed values to reflect actual property values.
Appraised Value:
An appraised value is determined by a licensed appraiser who thoroughly evaluates your property’s condition, location, and comparable sales in the area. While an appraisal provides a professional estimate of your home’s worth, it represents the opinion of one individual and may differ from both market and assessed values. Appraisals are typically required by lenders during the mortgage approval process to ensure the property’s value supports the loan amount.
What The Internet Has To Say About It:
Popular real estate websites also offer estimates of property values based on their proprietary algorithms. These estimates consider market trends, user-provided data, and other variables. However, they are generalized and may not accurately reflect the unique features and condition of your home. Think of these estimates like the Kelley Blue Book for cars—they provide a ballpark figure but may vary significantly from the actual market value determined by local conditions and specific property attributes.
What it Means For You As A Seller:
As a seller, it’s essential to educate yourself on these valuation methods and terminologies to navigate the complex landscape of real estate pricing effectively. Developing a comprehensive understanding of market value, assessed value, and appraised value empowers you to make informed decisions when setting an asking price for your home. Collaborating with a seasoned real estate professional who possesses in-depth knowledge of local market dynamics and can deliver detailed Comparative Market Analysis (CMA) reports is invaluable. A CMA not only evaluates recent sales of comparable properties in your neighborhood but also factors in current market trends and property conditions to accurately estimate your home’s market value.
Setting an appropriate asking price is a critical component of the selling process. Overpricing your home can deter potential buyers and result in prolonged time on the market, potentially leading to price reductions that may raise concerns among buyers about the property’s perceived value. On the other hand, pricing your home too low could mean missing out on maximizing your financial return. It’s essential to exercise patience and implement a strategic pricing strategy, guided by your trusted real estate agent, to attract qualified buyers and negotiate a favorable sale price. By leveraging market insights and expert guidance, you can enhance your chances of achieving a successful and profitable sale of your Chicago home.
Navigating the process of selling your home in Chicago involves understanding the nuances of property valuation. By grasping the distinctions between market value, assessed value, and appraised value, you can confidently determine an optimal listing price. Remember, conducting thorough research and collaborating with a seasoned real estate professional are key to ensuring a successful and profitable sale of your Chicago home.