What is the difference between "appraised value" and "market value"?

The distinction between appraised value and market value is significant within real estate and is highlighted by how each is determined. Appraised value is based on an objective assessment conducted by a qualified appraiser who utilizes specific criteria, including property condition, location, and comparable sales, to provide a thorough analysis of a property's worth. This formal evaluation often adheres to standardized methods and guidelines, ensuring that the appraisal is consistent and reliable for financial institutions or for property taxation purposes.

In contrast, market value represents the price that buyers are currently willing to pay for a property in an open and competitive marketplace. It is influenced by numerous factors, such as current market trends, the economic climate, and buyer sentiment, which can fluctuate and lead to variations in selling prices.

The other options present misunderstandings of these concepts. For instance, appraised value is not primarily determined by government entities, and market value is not a universal standard price but rather a reflection of buyer intentions in a specific market environment. Additionally, it is not accurate to claim that market value is always higher than appraised value, as the two can often be very close or even diverge in different market conditions. Lastly, neither value inherently includes or excludes fees and taxes, as they are separate considerations in the