Questions
What is the relationship between the assessed value of a property
and an appraisal?
An appraisal is the value placed on a
property by a certified appraiser. When a lender is involved in a
purchase they require an appraisal on the property as an integral
part of loan underwriting. The sales comparison approach is the
most utilized in residential purchases. Generally speaking, the
appraised value of the property suggests a fair purchase at that
amount.
On the other hand, a tax assessment on a
property is usually not a good indicator of the fair market value
of the property. It may help you to compare the relative value of
properties next to each other or on the same street but the only
certain conclusion you can draw is what your taxes will be on the
property; not how much you should pay to purchase that property.
Whether you’re looking at an appraisal or
a tax assessment, usually the more recent the report, the more
accurate it is. Remember, assessment has only to do with the taxes
and appraisal has to do with the comparative market value of the
property. A property is demonstrated to be worth what a ready,
willing, and able buyer will pay without being under duress.
NOTE: A previous tip on this page on this
same topic was published erroneously without authorization of the
author, Nena Groskind. It has been removed at the request of the
author and no endorsement by her of our business or services
should be implied. |
