Every month, I receive questions about real estate and I am always happy to answer them. If I publish your question, you’ll receive a gift card for Perry’s Steak House as my way of saying thank you for asking me. Asking a question is easy. Visit DaleRoss.com and click on “Contact me” or call 281-599-6575. This month’s question is posed by Wilson. Thank you Wilson! Enjoy your steak!

Q: I had my home appraised in March. It appraised for $468,500. Now it’s October and I sold my home. When I sold my home, the buyer agreed to $458,000 and it appraised for $446,000. Why is it worth less than it was in March? 

A: Hi Wilson,

Your home is not necessarily worth less than it was in March. In fact, it’s probably worth about the same as it was in March. The difference is Market Value compared to Appraised Value.

An independent appraisal that is performed doesn’t base the appraisal on Mortgage Market Value. Market Value is how much a buyer is willing to pay and at how much a seller is willing to sell. Mortgage Market Value is the amount a lender is willing to lend on a property based on recent comparable sales.

Homes often appraise for less than Market Value. That doesn’t mean it’s worth less than the agreed sales price. It only dictates the amount the lender is willing to risk lending on that property. The sales price is the Market Value. 

Until next month, 

Dale Ross, Your Real Expert