Have you ever wondered what your home is worth?

If so, you may have heard the term market value.

Market value is an important part of a home appraisal. However, it can be confusing for homeowners.

In simple terms, market value is an opinion of what a property may sell for in a competitive market. It considers the property, the local market, and recent sales.

However, market value is not the same as the asking price.

It is also different from the assessed value used for property taxes.

So, what does market value mean in a home appraisal?

Let’s take a closer look.

What Is Market Value?

Market value is an estimate based on available market evidence.

During an appraisal, the appraiser studies the property. The appraiser also reviews recent sales of similar homes.

In addition, the appraiser considers current market conditions.

For example, the analysis may include:

• Location
• Home size
• Lot size
• Age
• Condition
• Layout
• Features
• Recent improvements
• Comparable sales
• Local market activity

As a result, the final opinion of value is based on several factors.

Why Does Market Value Matter?

Market value can help homeowners understand their property’s position in the local market.

For example, you may be planning to sell your home. You may also be considering refinancing.

In either case, knowing your home’s value can provide useful information.

Market value can also be important for estate planning and other financial needs.

However, an appraisal does not guarantee a specific selling price.

The final sale price can be affected by many factors. These may include buyer demand, marketing, negotiation, and timing.

Therefore, market value and sale price are related, but they are not always the same.

Market Value vs. Asking Price

Many homeowners confuse market value with asking price.

The asking price is the amount a seller chooses when listing a home.

Market value is based on an analysis of the property and market evidence.

For example, a homeowner may list a property above its appraised value.

Another seller may choose a lower asking price to attract more buyers.

Therefore, the asking price is a marketing decision. The appraised market value comes from an appraisal analysis.

Market Value vs. Sale Price

The sale price is the amount a buyer and seller agree to in a transaction.

Sometimes, the sale price and appraised value are similar.

However, they can also be different.

For example, a buyer may agree to pay more because of strong interest in a property.

On the other hand, a seller may accept a lower price because of the timing or other circumstances.

As a result, the sale price does not always tell the entire story about a property’s market value.

Market Value vs. Assessed Value

Assessed value is another term homeowners often hear.

However, assessed value and appraised value serve different purposes.

A local taxing authority generally uses assessed value for property tax purposes.

A real estate appraisal, on the other hand, provides an opinion of value for a specific purpose.

Therefore, you should not assume that your property’s assessed value is the same as its market value.

If you have questions about your tax assessment, contact your local taxing authority for information about the assessment process.

What Factors Affect Market Value?

Many factors can affect a home’s market value.

Location

Location is one of the most important factors.

For example, nearby roads, services, parks, and other neighborhood features may affect buyer interest.

In addition, different neighborhoods can have different market conditions.

Therefore, two similar homes can have different values based on location.

Size

Home size can also affect value.

Larger homes often provide more living space. However, size alone does not determine value.

The layout and usefulness of that space also matter.

For example, two homes with similar square footage may have different layouts.

As a result, they may not have the same market value.

Condition

The condition of a home is another important factor.

A well-maintained home may compare differently from one with significant repairs needed.

For example, the condition of the roof, windows, HVAC system, kitchen, and bathrooms may be considered.

However, condition is only one part of the appraisal.

The appraiser considers the entire property and relevant market data.

Recent Improvements

Homeowners often make improvements over time.

These may include:

• New roofing
• Updated kitchens
• Remodeled bathrooms
• New flooring
• HVAC replacement
• New windows
• Finished basements
• Exterior improvements

However, the cost of an improvement does not automatically equal the amount added to market value.

Therefore, homeowners should not assume that every renovation increases value by the same amount spent.

Comparable Sales

Comparable sales are a major part of many residential appraisals.

These are recently sold properties that share important similarities with the home being appraised.

For example, an appraiser may consider homes with similar locations, sizes, ages, and features.

However, the closest sale is not always the best comparable.

Instead, the appraiser looks for sales that provide useful evidence for the property being analyzed.

Why Local Market Knowledge Matters

Real estate markets can vary from one community to another.

This is especially important when looking at individual neighborhoods.

For example, homes in different parts of Peoria may have different characteristics and market activity.

Likewise, nearby communities in Central Illinois can have different housing trends.

Therefore, local knowledge can help an appraiser understand the market more clearly.

An appraiser reviews relevant sales and considers how those properties compare with the subject property.

Can Market Value Change?

Yes. Market conditions can change over time.

Buyer demand can increase or decrease. Interest rates can also affect purchasing power.

In addition, the number of homes available for sale can change.

As a result, a home’s market value may change over time.

This is one reason why an appraisal from several years ago may not reflect the property’s current market value.

If you need to know the current value of your home, a new appraisal may provide more relevant information.

Can Homeowners Increase Market Value?

Homeowners can maintain and improve their properties.

For example, regular maintenance can help protect the home’s condition.

Updates may also improve the property’s appeal.

However, there is no single improvement that guarantees a specific increase in value.

Therefore, consider your home’s location and surrounding properties before making a major renovation.

It is also helpful to think about your long-term goals.

An improvement that makes sense for your family may not have the same effect on market value.

What Does an Appraiser Do?

A residential appraiser analyzes the property and relevant market information.

First, the appraiser gathers information about the home.

Next, the appraiser considers the property’s characteristics and condition.

The appraiser then researches comparable sales and other market data.

Finally, the appraiser analyzes the information and develops an opinion of value.

The process involves more than simply looking at the home and choosing a number.

Instead, the value is supported by property information and market evidence.

What About Online Home Value Estimates?

Online home value tools can be convenient.

They may provide a quick estimate based on available data.

However, they may not know everything about your property.

For example, an online estimate may not fully account for recent renovations, condition, layout, or other property-specific details.

Therefore, an online estimate should not automatically be treated as a professional appraisal.

If you need a professional opinion of value, consider working with a qualified residential appraiser.

Understanding Market Value in Peoria, Illinois

Homeowners in Peoria and Central Illinois have many different types of properties.

Homes can vary by neighborhood, age, size, condition, and features.

Because of this, there is no single value that applies to every home.

Instead, each property needs to be considered on its own.

At Leroy Albany Appraisals, we provide residential appraisal services throughout Peoria and Central Illinois.

Our appraisal work considers the property and relevant market data.

Whether you are selling, refinancing, planning an estate, or simply researching your home’s value, a professional appraisal can provide useful information.

Final Thoughts

Market value is an important part of a home appraisal.

However, it is not the same as the asking price, sale price, or assessed value.

Instead, market value is based on an analysis of the property and the market.

Location, size, condition, improvements, comparable sales, and market conditions can all play a role.

Therefore, understanding market value can help you make more informed decisions about your property.

If you want to learn more about your home’s market value in Peoria, IL, contact Leroy Albany Appraisals to learn about our residential appraisal services.