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What is the difference between appraisals and assessments? I will explain everything you need to know about both today.Want to sell your home? Get a FREE home value report. Want to buy a home? Search all homes for sale.Buyers and sellers often get appraisals and assessments mixed up, so I want to explain the difference between the two today. The appraisal is something that the bank orders when you get a mortgage. The bank will send out an appraiser to determine the base value of the mortgage. An assessment is something the county does to set a tax base for everyone in the county. Each individual home is assigned a value that is usually quite a bit less than the market value. When you add up all the millage in the city of Pittsburgh from the school districts, libraries, and counties, that comes to $22.88 million. If you have a property assessment of $100,000 and multiply by that millage of 22.88, your taxes would be $2,288. One thing you should keep in mind is that the MLS uses the county assessment as a market value in listing sheets. You may see an assessed market value of $100,000 on a listing sheet for a property that the seller has priced at $190,000; that does not mean that the home is overpriced. The county assessment determines the market value for tax purposes. You want the assessed value to be low because then the taxes will be lower than they would be if they were based on the sales price of the home. The county orders assessments to set a tax base. Now, that could change after you close on the house. The county often reviews sales prices and they may increase the assessed value of the property. This doesn’t happen very often, and it is incredibly rare for the assessed value to be the same as the sales price. Finally, there is one other important value that you should be aware of: the Homestead Exemption. If you are buying a property that you plan to live in, you can apply for the Homestead Exemption to get a chunk of value taken off the tax base. This option is not available for investment properties. You need to apply to the county for the Homestead Exemption. The county reassesses the Homestead Exemption each year on March 31st. If you are interested in applying for the Homestead Exemption, let me know and I can send you the application form. If you don’t apply for the Homestead Exemption, nothing happens—you will still have to pay taxes based on the assessed market value of the home. Hopefully, you have a better understanding of appraisals and assessments. If you still have questions about either, just give me a call or send me an email. I would be happy to help you!