Assessed values has nothing to do with market value
One of the biggest misconceptions in real estate is Assessed Value. Assessed Value is an amount that a city puts onto a property in order to determine annual taxes.
A good definition would be: The dollar value of an asset assigned by public tax assessors office for the purposes of municipal taxation.
As a property owner you want the assessed value to be as low as possible. The city wants this number to be as high as possible. If you own a home that you keep doing renovations to your assessed value will increase every time you apply for a building permit. Why? Because the city views this as bettering your homes value and they will jump at any chance they can get the tax you.
Assessed Value is based on the land and the actual building. The assessed value estimate is based on a number of things like sales transactions, building inspections and use.
Today’s real estate buyers are obsessed with assessed value. When buyers see an asking price of $500,000 but the Assessed Value is $430,000 they have a hissy fit. When the agent tells the buyer that you cannot base Market Value on the Assessed Value the buyers look at the agent glazed over. That is, until the agent says… if this property was assessed at the asking price you would not be able to afford the annual taxes. You want this number to be as low as possible.
The market changed every day and values go up and down. Assessed values only change once per year which is why they should be treated as estimates for tax purposes and nothing more.
Lower is better.
