The 3 Values of Your Home

Have you ever wondered why there are so many different types of home values? You go to sell your house and your agent tells you that your house is worth $100,000.  How can that be, the insurance company has you carry insurance to replace your house for $180,000 and your property taxes are based on a value of $80,000?

True home value is subjective and dependent upon who is determining the value and for what the value is being used.  In other words, the value of your home just depends upon for what you need to know the value.  Below are the definitions of the three primary values of a home and what they mean.  This can help you understand the various home values you may refer to from time to time.

Market Value – Market value is the value that a real estate appraiser or real estate broker determines is the price that a buyer would be willing to pay to own your home.  This means that during a time where the market is down, where people are not buying homes or your neighborhood is not considered desirable, the market value will be low. However, during times where buyers are waiting for homes to go on the market, or in neighborhoods that people are wanting to live, market value will be higher.

Replacement Value – The replacement value of your home is the price that an insurance company places on your home. It is considered the amount that would be required to replace your home in the event of a fire or other disaster. The replacement value is typically higher than the current market value because inflation is assumed when determining the replacement value. In addition, it generally will take more to rebuild something than to originally build it. Therefore, replacement value is typically the highest value placed on your home.

Property Tax Value – The property tax value is one of the most talked about and confusing of the home values. The property tax value can differ from state to state for a similar home due to state regulations, laws, and market. The market has determination of property tax value as of each January first for that whole year in Idaho. If the property tax value exceeds the market value, it is a good idea to ask for a re-evaluation of the property tax value.

Here are a few homes to view that are current in the Boise, ID Market furnished by IDX/IMLS: