What Is Market Value vs. Appraised Value in Real Estate?
When selling a home, the market value and appraised value often differ — but both play a major role in pricing, offers, and financing. Understanding the difference helps FSBO sellers avoid pricing mistakes and surprises before closing.
💡 What Is Market Value?
Market value is what a property is likely to sell for in today’s open market. It reflects what a willing buyer and seller agree upon under normal conditions — without pressure or special circumstances. Market value is influenced by:
- Recent comparable sales (“comps”) in the same area
- Current market trends and buyer demand
- Property condition, upgrades, and curb appeal
- Location, school zones, and neighborhood desirability
FSBO sellers often use market value to set their list price and attract the right buyers while staying competitive. A Comparative Market Analysis (CMA) is one of the best tools for estimating this value before listing.
🏠 What Is Appraised Value?
Appraised value is an objective estimate of a property’s worth determined by a licensed real estate appraiser. It’s most commonly used by mortgage lenders to confirm that a home’s sale price aligns with its fair market value before approving a loan.
Appraisers use a standardized process that includes:
- Reviewing recent comparable property sales
- Inspecting the property’s interior and exterior condition
- Assessing lot size, square footage, and amenities
- Adjusting for location and market trends
If the appraised value comes in lower than the purchase price, the buyer’s lender may reduce the loan amount — which can impact negotiations or delay closing. Learn more about this in our guide on appraisal contingencies.
📊 Market Value vs. Appraised Value: Key Differences
| Aspect | Market Value | Appraised Value |
|---|---|---|
| Definition | Estimated selling price in an open market | Professional valuation for lending or verification |
| Determined By | Buyer and seller expectations, current market trends | Licensed appraiser’s evaluation |
| Purpose | Used to set asking price and negotiate offers | Used by lenders to approve loan amounts |
| May Differ When | Market is fast-moving or emotional pricing occurs | Appraiser uses older comps or stricter valuation |
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📍 Why the Difference Matters for FSBO Sellers
When selling FSBO with Brokerless, understanding both values helps you set realistic expectations. Listing too high above the appraised value can limit buyer financing, while pricing below market value can leave equity on the table.
Brokerless provides MLS exposure and pricing guidance tools that help sellers find the sweet spot — maximizing offers while ensuring appraisals align for a smooth closing. See how it works for FSBO sellers.
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