How does appraised value relate to market value?

Appraised value is fundamentally an opinion of a property's potential market value based on various assessments and evaluations conducted by a qualified appraiser. This opinion takes into consideration multiple factors, including recent comparable sales, the condition of the property, and current market trends. This nuanced understanding is essential because appraisals aim to estimate what the property could feasibly sell for in an open and competitive market, rather than establishing an infallible or exact figure.

While appraised values can often reflect market trends, they do not always align perfectly with market values due to unique circumstances that could affect a specific property or fluctuations in the market. Thus, appraised value serves as an informed estimate rather than a definitive ruling on market worth.

In terms of the other options provided, an exact representation of market value would imply that appraisals are always accurate to the dollar, which is not realistic given the subjective nature of property evaluation. The notion that appraised value always exceeds market value contradicts the variability of market conditions and fluctuating buyer behavior. Lastly, while appraise value may play a role in assessing property tax rates, it does not directly determine them, as tax rates are influenced by broader fiscal policies and local government decisions. Thus, the correct understanding is that appraised