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The difference between Real Estate assessed value and fair market value explained in detail.
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Bill Gassett
March 23, 2014 12:29 PM
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There is a huge misconception sometimes with the correlation between a homes assessed values vs fair market value. Folks it is very rare that there is any kind of correlation! Often time the reason the general public becomes confused by these types of valuations is from Realtors themselves.
Here is an example of what I mean. "Come visit 50 Main Street as it is priced $50,000 below the assessed value!" This type of advertising becomes common in real estate by Realtors who don't know any better. What a statement like this does is confuse people. The inference is that because the home is priced so far away from the assessed value it must be a bargain. WRONG!
This is the perfect example of a real estate agent that knows nothing about property valuation. Either that or they think a sucker is born every minute. What the above example shows is more than likely someone who is paying more taxes on their property than they should be.
An assessed value is nothing more than a measuring stick for a city or town to collect taxes from owners to meet a budget to run the municipality. If market values of homes are dropping well guess what at some point so will the assessed values. What do city's and towns do to ensure they get the revenue they need? If you guessed raise the tax rates then your are correct.
In the article I will carefully take you through why there is very little correlation between an assessed real estate value and fair market value.
You will also see how you can challenge an assessed value if you think you are being unfairly taxed by the city.