In Real Estate, you have three basic values; an appraised value of the home, the county tax-appraisal value and then the market value of the home.   All are important, but in the end, only one truly matters.   I hear all the time, “My house was appraised for this,” or ” I’m not paying that much since the tax value is less.”   When buying or selling a home, the only value you have in the home is what someone else is willing to pay for it!   Let’s break them down.

The appraised value of your home is determined by a licensed home appraiser, based on his judgement, experience and comparable sales in the area.   This is usually (hopefully)  a number slightly higher than what the house is selling for.   If the house does not appraise for  at least the sales price or more, the  buyer will have to come up with the extra money, the seller will have to come down on the price, the buyer may lose all financing, or the seller can put it back  on the market and hope to attract a   different buyer.   This seems to rarely happen in Waco, but it has happened to me twice in my short-but-not-long Real Estate career.   One situation was worked out just fine, the other fell apart faster than you can blink.   Check with your lenders to make sure they use licensed and experienced appraisers!

Next we have the appraised value given by the county which determines the amount of property taxes you owe.   This is always a sticky number because it never fails that when the amount increases year-to-year, the homeowner gets upset.   It Waco, it seems like they gradually increase every 2 years in many areas, but it all depends on the current market that year.   This year, our home actually went down, while another agent in our office had his value skyrocket.   McLennan County did have some sort of “glitch” this year, with many homeowners values rising above the capped 10% value, forcing many protests and re-do’s.   A lot of buyer’s see a low tax-value and wonder why they are paying more than this amount, but again this one you want low to save you money.

Finally we have the market value of your home, which ultimately is the only value that matters.   Let’s say your home  was appraised at $250,000 when you re-financed four years ago.   Now let’s say you have to move for whatever reason, so you decide to put your home on the market and list at just over  what you were told it was worth at $275K.   The market gets slow, it’s winter, recession or any number of things can make sellign a home difficult and you ultimately sell four months later for $225,000.   Now how much is the house worth?   It’s worth what a buyer is willing to pay for it at any given time!   At this time, apparently it’s worth $225,000.

Real Estate, like stocks and bonds, precious metals, oil and gas, art and collectibles, are sold in a market.   You need to treat a house like a home first, investment second.   Live in it, enjoy and take care of it, and it should take care of you in the future with a modest return on investment (sometimes a big one!)