Every so often, a homeowner or buyer will tell me, “The County of San Bernardino shows my property’s assessed value as X – so why should I pay Y?” or “I had my home appraised for X, so why should we list it for Y?”
These are fair questions, but the key lies in understanding the differences between assessed value, appraised value and market value. They are three different numbers, used for three different purposes, and they rarely line up exactly.
The assessed value is the number assigned by the county assessor for property tax purposes. In San Bernardino County, this figure is often based on the home’s purchase price at the time of sale, plus a small annual increase allowed under California’s Proposition 13. It isn’t updated each year to reflect real-time market shifts. That means your home’s assessed value could be tens or even hundreds of thousands lower than what buyers are willing to pay. It’s a taxation tool, not a market tool.
The appraised value, on the other hand, is the number a licensed appraiser provides – usually hired by a lender – when a home is being financed. Appraisers look at comparable sales, property condition, size and neighborhood factors, but their job is to protect the bank, not to capture emotional value or competition in the marketplace. Appraisals tend to be conservative by design. They answer the question: “If the borrower defaults, what can this house reasonably sell for so the lender doesn’t lose money?”
Market value is something else entirely. It’s what a willing buyer will pay in an open market, given current supply, demand and timing. Market value shifts week to week depending on interest rates, competition and even buyer psychology. If a property generates multiple offers, market value can soar above the appraised value. If buyers are cautious and inventory is high, market value may sit lower, even if the appraisal supports more.
This is why you might see such a wide spread between these numbers. Let’s say your San Bernardino County assessed value is $350,000, your lender’s appraisal comes in at $455,000, but the market activity shows buyers lining up at $435,000. Which number matters most? From a taxation standpoint, the county’s $350,000 is what determines your annual property tax bill. From the lender’s standpoint, the $455,000 appraisal governs how much money they’re willing to lend. But in terms of actually selling your home, the only number that gets the deal done is the $435,000 that a buyer is willing to bring to the table.
For sellers, it’s important not to anchor too heavily on assessed value or even the appraisal alone. These are reference points, but they don’t drive the offers coming in. A skilled local agent will help you set your asking price based on active buyer demand and comparable sales, while also preparing you for possible appraisal gaps if financing is involved. For buyers, it’s just as important to understand that appraisals don’t always validate your offer, especially in competitive markets. That’s why having contingencies, cash reserves or negotiation strategies ready is critical.
At the end of the day, assessed value is about taxes, appraised value is about lending risk and market value is about real-world demand. When it comes to actually buying or selling property, market value is the number that matters most because it’s the one that gets you to the closing table.
Theresa Grant is a real estate broker and columnist covering Lake Arrowhead, Crestline, Running Springs and the surrounding mountain communities. Reach her at (909) 442-1345, visit www.HomesInLakeArrowhead.com and follow her on social media, @TheresaGrantRealtor. Theresa is a Broker Associate with REAL Broker Technologies. DRE#01202881.
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