The best way to determine the market value of real estate is to hire a professional, licensed appraiser. The market value is the price that you could likely sell your property for in the near future.
When a lender is preparing to provide a real estate loan to a buyer they hire an appraiser to determine if the value of the real estate is enough to cover the loan amount to be certain that if the buyer defaults on the loan, the lender will be able to sell the property to recoup the funds that they loaned to the buyer.
An appraiser has a very specific job and they must stay within certain parameters to meet the requirements of an appraisal. This is why some homes that are under contract do not meet appraisal value. An appraiser chooses three very similar properties within a very close proximity to compare to the property they are determining a value for.
In contrast, when a Realtor suggests a list price, they are using comparables in a close proximity as well, but they do not have to be as specific as an appraiser to determine the list price. When the market fluctuates with less inventory and high demand, Realtors are able to price homes slightly higher and get more money for their clients.
When a buyer is paying cash and they do not order an appraisal, they can pay more for a home than what it may have appraised for at the time.
Another misconception is that the appraised value on the property tax records for the county appraisal district is the same as market value. This is not the case. Tax districts determine values on information they can gather from various sources and use that information to decide on an appraisal value.
Sometimes the tax appraisal value is high, but more often in Walker County, the tax values are substantially lower than the market value of the property. This is a selling feature to a buyer because it means that they are paying less in property since the house is valued at less than what they paid for it.
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