What Is the Difference Between Assessed Value and Market Value?

Here is the money problem, Patriot Nation: the number that prices your offer is not the number that prices your tax bill, and mixing them up costs buyers and homeowners real money. Market value is what a buyer would pay today. Assessed value is what the county says for tax purposes. They often differ, and only one of them sets your tax bill. Let's put both in their lanes.

Ask Patrick how assessed and market value differ for your home.

Market value: what a buyer would actually pay today

What it is: Market value is the price a willing buyer and seller would agree on in today's market. An agent's comparative market analysis and a lender's appraisal both try to measure it, using recent closed sales of comparable homes adjusted for size, condition, and location.

What it costs you: This is the number your offer is built on. In a multiple-offer situation, buyers bid above it, and when the bidding runs ahead of the evidence, the appraisal can come in below your contract price and open a gap you have to cover in cash.

The real-world play: If the appraisal comes in below your contract price, that is a market-value problem to solve, and your financing contingency gives you room to renegotiate or walk. Price the offer off the evidence and you rarely meet that problem.

Assessed value: the county's number for your tax bill

What it is: Assessed value is the figure your county appraisal district assigns each year and applies tax rates to. In Texas, assessed values tend to move more slowly than the market because the appraisal district values your home as of January 1 each year using mass appraisal of similar homes, not a fresh buyer's-eye look.

What it costs you: Your annual bill is assessed value times local tax rates, minus exemptions. On a $300,000 home in San Antonio, property taxes typically run roughly 1.8% to 2.5% of assessed value, which is about $5,400 to $7,500 a year, and the homestead exemption lowers the taxable slice.

The real-world catch: In a hot San Antonio market, market value can run ahead of assessed value; when the market cools, the assessed value can briefly sit above it. Neither is wrong, they just answer different questions, which is exactly why you check both.

Which number should guide your offer?

Price your offer off market value evidence: recent closed sales of comparable homes, adjusted for size, condition, and location. Lenders ignore the assessed value entirely and order their own appraisal, so a low assessed value does not limit the price you can offer and a high one does not add to your loan.

That is the part that surprises buyers most: the county's number never appears in your loan file. The appraiser's number does, and it is the one that sets your down payment and your cash to close.

Which number drives your tax bill?

Your annual bill is assessed value times local tax rates, minus exemptions. Keep your homestead exemption current, check your notice of appraised value every spring, and appeal early if the evidence supports it. That routine alone saves Texas homeowners real money year after year.

The protest deadline matters: file with your appraisal district by the date on your notice, before the deadline passes, using comparable sales as your evidence. It is free, it takes minutes, and a successful protest lowers the number your rate is multiplied against.

Patrick's advice: keep the two numbers in their lanes

Market value is the negotiation number. Assessed value is the tax number. I price offers off the market evidence so the appraisal backs the contract, and I protect the tax side with the homestead exemption filed and the protest filed when the numbers support it.

Know which number a decision runs on and you will not be surprised at the closing table or in the mailbox. That is the whole game, and it is how you keep more of your money. Make it a great one.