The market value of a house depends on what the buyer is willing to pay when the house is sold, while the value assessed is determined by an appraiser evaluating the property on behalf of the lender. Both look similar but actually are very different.
Homes are often registered based on what is approved by real estate agents and sellers. However, the price does not represent what houses are officially sold on the market, but only educated and researched opinions that lead them to the most logical initial prices for a particular house.
They see all the desired homes in their chosen area and choose the one that suits their needs at the lowest price. ‘Housing market value’ (which is also known as ‘boligmarkedsverdi’ in the Norwegian language) keeps changing according to supply and demand, the unemployment rate, in addition to current and anticipated changes in the economy.
The value that is assessed is the opinion of what is assessed by an appraiser of a property. This information is collected for the purpose of obtaining a loan. Because houses are collateral for lenders and they do not want to lend more than the value of the property, they send a professional to investigate the house and compare the value with other houses in the neighborhood.
The assessor will measure many areas of the house, test utilities, record the condition of the property and then compare it with other local houses that are similar and have just been sold. Not only will they consider what other comparable homes are for sale, but what they have sold in the past. This information is then handed over to the creditor, who will determine whether the house is worth what the buyer asks, or the homeowner who wants to be refinanced, in the loan.