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Home » Blog » Difference Between Market Value and Assessed Value

The Difference Between Market Value and Assessed Value in California

Published on September 25th, 2018 | Updated on December 30th, 2021

At SoCal Home Buyers our vision is to provide you with a fast, safe and simple solution to selling your home without the stress and hassle of listing it on the MLS.

Market Value vs Assessed Value

One of the most important factors when selling your California property is getting the listing price right.

You can certainly get an appraisal to determine the value of your home, but there are more affordable ways to achieve the same goal.

If you’re wondering what the difference is between the market value vs. assessed value for your property you’ve come to the right place.

In this post we’ll let you know how each one works in California so you can ensure you're getting the best price for your property.


What is the Fair Market Value of a Home?

Put simply, fair market value is the price your property should command based on the current market.

However,  there's several nuances that make up a home’s fair market value (especially in California) that you'll have to look at.

The two most obvious ones are the condition of the home and its location.

If you're a landlord and you’re selling a property that currently has renters, you'll want to schedule a time to talk to them and tour the property.

With Tenants you have less control of the condition in which the property is shown.

So you want a realistic idea of how potential buyers are going to see the place.

You also need to compare your property with other comparable properties in the neighborhood.

Try to find homes within a few-mile radius that are similar in square footage, number of bedrooms, age, and overall condition.

You can look at what’s currently listed on the market, but before that, look at those that were recently sold to get a feel for current buyer sentiment.

Did each home sell quickly?

What was the difference between the list price and the sale price?

Did sellers have to lower their asking price or did they get Top Dollar?

Use this information to get an idea of a reasonable Fair Market Value for your property.

What is Assessed Value?

While market value refers to the price of your home in relation to current market value, the assessed value refers to the estimation of your homes value that’s used to assess property taxes.

This will typically be determined by your counties Municipal Property assessor.

This is important for homeowners regardless of whether it’s your primary residence because you’re responsible for paying taxes to your local municipality each year.

If you’ve inherited a property, you’ll be responsible for keeping up with the tax payments until you decide to sell.

California's Proposition 13 Explained

California’s property value assessment rules are set forth in Proposition 13.

Luckily for homeowners, whether you’re handling an inheritance or an income property, the assessment rules are there for your protection.

First, the maximum tax rate for the entire state is 1% of the assessed value.

All of the collected taxes go to your local county government and are used at their discretion.

A full assessment is typically only conducted when a property is sold or transferred.

Otherwise, it increases 2% each year to account for inflation.

There’s helpful exclusions for people who inherit homes directly from their parents. Under the parent-child reassessment exclusion, your property tax won’t be reassessed.

What that means is your tax burden won’t suddenly jump because ownership was transferred to you.

For tax purposes, it will continue to be assessed using the same value and rate that was assigned to your parents. That can help you keep the home if you want to, or at least not force you to sell right away if you’re not quite ready to rush through the process.

When a property is sold or transferred to a non-child heir, the property is automatically assessed at 100% of its fair market value.

That means whatever amount your property value assessment comes to is the amount buyers could expect to pay when you’re ready to sell.

It’s important to do your own research to make sure a tax assessment doesn’t negatively impact your ability to sell at an actual fair price.

It can be helpful to work with a local real estate agent to make sure you have realistic expectations while also ensuring an accurate assessment process.

Assessed Home Value

What if Your Property is Assessed Lower than Expected?

If you’re trying to sell a rental property or inherited property, the assessed value may seem important.

After all, won’t buyers look at that number as a basis for making an offer?

That may be true, but assessed values are only a starting point.

The county property assessor uses general information like comps and formulas.

They’re not looking at your exact home and any unique features it has to offer beyond square footage and lot size.

When you list the house on the market, you need to include great pictures and text in the listing to convey the extra value a buyer may be receiving.

This extra upfront effort could help get your home sold much faster and at a better price because the buyer has more information to craft their offer.

High Property Taxes

Whether or not you’re planning to sell the property, you may be suffering from expensive property taxes, particularly if your assessed value is high.

Luckily, the state of California offers a tax abatement program in the form of an exemption.

You can qualify for up to $7,000 reduced from the assessed value of the property.

At the 1% tax rate, that’s equivalent to a $70 discount.

To be eligible, however, you’re required to live in the property as your primary residence.

If you meet that qualification, you can file an exemption claim with the county assessor.

Contact your local treasurer’s office or taxation office for the correct contact information in your county.

Selling to a Cash Home Buyer


Figuring out the difference between the fair market value of your California home and its assessed value can be tricky, especially if you’re catering to traditional buyers.

That’s where it can be helpful to choose to work with a professional investor. They have a better understanding of market nuances to determine the true value of your home no matter what condition it’s in.

A personal home buyer may be put off by renters or physical issues on the property, but an investor is accustomed to these problems.

Plus, by getting an all cash offer, you can close quickly and avoid paying potentially high taxes when the next due date rolls around.

At SoCal Home Buyers, we make the selling process fast and simple. In fact, you can even keep more cash in your pocket by avoiding real estate agent fees.

Want to learn more? Reach out and contact us today for your all cash offer.

Or, watch the short video below to learn more about us.

Steve V.
Steve V.
23:28 18 Sep 21
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The team at SoCal Home Buyers is professional and caring. From my first interaction with Angel, and then Gavino, Cyndi, and finally, Doug, everyone answered questions and responded to... emails and calls in a timely fashion. They made the selling process straight forward and effortless. I was concerned about selling to a "home buyer," but every promise was fulfilled from a 30-day escrow, an "as is sale" with no clean-up or haul-away, and finally, an agreed upon price. I will not hesitate to recommend them to family and friends.read more
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Karl G.
01:54 28 Jan 20
I had the responsibility to sell my sister's home when she moved into a care facility. The home was a real mess as my sister never had any cleaning or yard work done in the past 10-15 years... along with having a lot of junk she had collected. I called SoCal Home Buyers, on December 12, to talk about the sale process and to get an offer from them to buy the property as my sister needed it sold quickly. I spoke with Lisa who gave me the information I needed and set up an appointment for December 14. The employee, Gabino, met me at the home, asked some questions and did a walk through of the home. When he finished he told me that he could give me a written offer in 10 minutes and went to his car to process it. The offer was fair and I asked for a month to finalize the sale, I think it could have been done in 2 weeks. Cyndi, the transaction coordinator, contacted me a few days later and explained the sale and closing process. She was frequently in contact with me regarding the paperwork and closing. The sale closed on time. I am very satisfied with SoCal Home Buyers. They were a pleasure to work with and I would recommend their services to anyone. Karl Gerlachread more
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Doug and his team at SoCal Home Buyers were beyond fantastic. We were selling from out of state, and they made everything extremely easy. They were always there with ready answers and... solutions for any issues that arose. It was the smoothest selling process we've ever had, and they really helped us with what could've been a difficult transaction. We highly recommend them.read more
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The team at SoCal Home buyers are ethical, kind and professional people. I was going through a difficult situation while trying to sell my parents house. The team treated me with dignity,... and respect and communicated with me at least once per week. The escrow company walked me through the process and answered all questions. Working with SoCal and the escrow company was very easy, during a difficult situation. Thank you SoCal Home Buyers!read more
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The team members at So Cal Home Buyers were friendly, courteous, and very professional. I was very hesitant to sell my home, but felt very comfortable with this company’s honesty and... business ethics. The team members made the process of selling my home comfortable to fit my needs and timeline. I would strongly encourage anyone looking to sell their home to contact So Cal Home Buyers first before signing a contract with any other agency.read more
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03:28 06 Jun 19
At one of the most stressful moments in my life, I was quite fortunate to have SoCal Home Buyers by my side. The family owned business was understanding, ethical, and professional in... handling the sale of my parent’s home. Doug and his lovely wife offered support in all aspects including providing an excellent escrow company which always answered my quite numerous questions. I feel very blessed to have had SoCal by my side!read more
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19:03 28 Nov 18
SoCal Homebuyers are great! They were professional and friendly to work with on a complicated property. The staff is excellent. Especially Danielle Lane, shes knowledgeable and patiently... explained every detail in the process. Thank you SoCal Homebuyers, from the beginning to the end you were excellent.read more
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