Market value is what a buyer will actually pay for your home in today's market. An appraisal is a licensed appraiser's professional opinion of that value, usually ordered by the buyer's lender to make sure the loan isn't larger than the home is worth.
Market value is what a buyer will actually pay for your home in today's market. An appraisal is a licensed appraiser's professional opinion of that value, usually ordered by the buyer's lender to make sure the loan isn't larger than the home is worth. The two are closely related and often land in the same range but they can differ, especially in a fast-moving market, and when they do it can affect your sale.
What is market value?
Market value sometimes called fair market value is the price a willing buyer and a willing seller would agree on for your home right now, with neither under pressure. It's driven by what's actually happening in your area: recent comparable sales, current supply and demand, your home's condition and location, and how many buyers are competing. Market value isn't a fixed figure carved into your deed; it moves with the market. In a hot market with few listings, it rises; when inventory piles up, it softens. The clearest evidence of market value is what similar homes near you have recently sold for.
What is a home appraisal (appraised value)?
An appraisal is a formal, documented opinion of value prepared by a licensed appraiser. On most sales it's ordered by the buyer's mortgage lender, not the seller the lender wants to confirm the home is worth at least what it's lending against, so it isn't over-exposed if the loan defaults. The appraiser inspects the property and analyses recent comparable sales, adjusting for differences in size, condition, features and location, then produces an appraised value in a written report. It's essentially a professional, defensible estimate of market value at a single point in time. Appraised value and market value are trying to measure the same thing but one is the market's live verdict, and the other is one expert's documented judgement of it.
Home appraisal vs market value the key differences
| Market value | Appraised value | |
|---|---|---|
| What it is | What a buyer will actually pay | A licensed appraiser's opinion of value |
| Who sets it | The market (buyers & sellers) | A licensed appraiser |
| Who orders it | No one it emerges from demand | Usually the buyer's lender |
| Main purpose | Sets the price a home sells for | Protects the lender's loan |
| How it's found | Recent comparable sales & demand | Formal inspection + comparables report |
| Changes with | The market, day to day | Re-done for each sale/refinance |
Why the two can differ
Because market value is set by live demand and an appraisal is one professional's measured opinion, they don't always match. In a competitive market, buyers bidding against each other can push the agreed price above what an appraiser who leans on recent closed sales will support; that difference is called an appraisal gap. A very unusual or highly upgraded home can be hard to appraise because there are few true comparables. And an appraisal is a snapshot: if the market moves quickly, a report can lag what buyers are actually paying. None of this means one number is 'wrong' they're simply measuring value from different angles.
What happens if the appraisal comes in low?
On a financed sale, a low appraisal below the agreed price is one of the most common ways a deal wobbles. The lender will only lend against the appraised value, so the buyer typically has three options: pay the difference in cash, renegotiate the price with you, or, if the contract allows, walk away. That's why an appraisal gap can cost a seller time and certainty. It's also one reason a cash sale behaves differently: with no lender in the picture, there's usually no required appraisal and no appraisal contingency, so this particular risk disappears.
Where assessed value fits in
It's easy to confuse appraised value with assessed value, but they're not the same. Assessed value is set by your town or city assessor to calculate property taxes, often on a multi-year cycle, and it frequently lags well behind the market. Appraised value is a current, professional opinion for a lender. When you're selling, neither your tax assessment nor a single appraisal is the same as your market value the price a real buyer will pay today.
Appraisal, market value, and an online estimate
An online home value estimate is a fourth thing worth understanding. A tool like PropVio estimates your home's market value from real property data and recent nearby sales a fast, useful starting point to see roughly where your home stands and what you'd walk away with. It's not a formal appraisal (only a licensed appraiser produces that, and a lender orders it once a financed buyer is under contract), and it isn't your tax assessment. Think of it as an informed estimate of market value you can see in minutes, before you talk to anyone.
What this means for you as a seller
Three practical takeaways. First, price to market value what buyers are actually paying nearby not to your tax assessment or a hoped-for figure. Second, if your buyer is financing, expect a lender's appraisal, and know that a gap can mean a renegotiation. Third, if certainty matters more than squeezing out the top dollar, a cash sale skips the appraisal step entirely. Whichever path you're weighing, it helps to start from a clear estimate of your market value and what you'd actually keep.
You can see that in a few minutes: enter your address on the home page or run the home sale calculator to see your estimated market value alongside your cash and listing walk-aways. If you decide to move forward, PropVio connects you with a local cash buyer or a licensed local agent free, and with no obligation.
Enter your address and PropVio shows you an estimate of your value plus your cash and listing walk-away numbers, side by side, in about three minutes. Free, no obligation, no pressure.
Common questions
What's the difference between a home appraisal and market value?
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Market value is what a buyer will actually pay for your home today. An appraisal is a licensed appraiser's professional opinion of that value, usually ordered by the buyer's lender to confirm the loan isn't larger than the home is worth.
Can market value be higher than the appraised value?
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Yes. In a competitive market, buyers bidding against each other can agree a price above what an appraiser will support from recent closed sales that difference is called an appraisal gap. It can also go the other way.
What is an appraisal gap?
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It's when the appraisal comes in below the agreed sale price. On a financed sale the buyer must usually cover the difference in cash, renegotiate, or walk away which is why a gap can cost a seller time and certainty.
Is appraised value the same as assessed value?
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No. Assessed value is set by your town for property taxes and often lags the market. Appraised value is a current professional opinion of value prepared for a lender.
Does a cash sale need an appraisal?
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Usually not. Without a lender there's typically no required appraisal and no appraisal contingency, which is one reason cash sales tend to be more certain and quicker to close.
Selling a house usually costs about 8% to 10% of the sale price. On a $400,000 home, that's roughly $32,000 to $40,000, most of it agent commission, plus closing costs, prep, concessions and moving on top.
Home value estimators are usually accurate within a few percent for homes currently listed for sale, but the error is much larger for off-market homes, commonly around 7% or more. They're a useful starting point, not a final answer.
Listing with a realtor usually nets you more money if your home is in good shape and you can wait a couple of months for the sale to close. A cash offer almost always looks lower on paper, but once you subtract agent commission, repairs, closing costs and the months of carrying costs a listed home racks up, the gap narrows.
