Home Value vs. Market Value: What Every Homeowner Needs to Know

If you’re thinking about selling your home, you’ve probably wondered: How much is my home really worth? Many sellers assume their appraised value is the best indicator of their home’s worth—but that’s not always the case.

A recent client of mine was surprised when their independent home appraisal came in higher than my suggested list price based on recent comparable sales. This is a common scenario, and it highlights the difference between home value and market value. Let’s break it down.

What is Home Value (Appraised Value)?

A home appraisal is an estimate of a property’s worth based on factors like:

 Square footage & layout

 Upgrades & renovations

 Condition of the home

 Location & neighborhood

Who determines it? A licensed appraiser hired by a lender (or privately by a homeowner).

Why does it matter? It’s used for mortgage approvals and refinancing, ensuring lenders don’t over-lend on a property.

What is Market Value?

Market value is what buyers are actually willing to pay in the current market. It’s based on:

 Recent comparable sales (comps)

 Current inventory (competition)

 Buyer demand & interest rates

Who determines it? The real estate market—meaning buyers, not just appraisers!

Why does it matter? Listing at market value ensures your home sells within a reasonable timeframe and for the best possible price.

Why Can Appraised & Market Value Be Different?

Appraisals look backward at past sales, while market value reflects today’s conditions. Here’s why they may not match:

 Market shifts: If prices are rising or falling, appraisals may lag behind.

 Unique homes: If there aren’t enough similar recent sales, the appraiser may struggle to determine value.

 Buyer demand: Even if your home appraises for more, buyers may not be willing to pay that price.

Why Pricing Your Home Right is Crucial

Overpricing your home based on an appraisal can lead to:

 Fewer showings—Buyers won’t bite if the price isn’t competitive.

 Longer time on market—Homes that sit too long often get lowball offers.

 Lost money—You may end up dropping the price later to attract buyers.

On the flip side, pricing based on market value helps you:

 Attract serious buyers

 Sell faster with stronger offers

 Maximize your home’s value without overpricing

Thinking About Selling? Let’s Find Your Home’s True Value!

If you’re planning to sell, don’t just rely on an appraisal—let’s take a market-based approach to pricing your home for success.