When selling your home, it is important to understand the difference between tax assessments and appraisals. While these two processes may seem similar upon first impression, they serve very different purposes when factoring the true value of a home.
A tax assessment is something governments can use to establish the value of a home. The tax assessor’s office hires a professional company that sometimes uses a technique called a “mass appraisal”. This is only useful for tax assessment purposes, and not at all useful for setting the asking price of a home. The assessment is a valuation of what the town believes a property to be worth in order to figure out the yearly property tax.
A tax assessor is interested ensuring that the taxes are reflective and accurate for a town’s financial budget. The local government establishes the value of a home by assessing and then reassessing homes in the nearby area. Depending on the area, it may receive reevaluation every few years. While this may seem reliable, certain areas change rapidly. Some increase and others become worth less, depending on many factors. Tax assessments can not reflect the immediate escalating or deflating market value on home sales because most towns do not update valuations as the market fluctuates.
A tax assessment is not an accurate measure of the current value of a home. It can help foster a better understanding of an appraisal, but it cannot ever replace one.
An appraisal is done to establish the current market value based on other home sales with similar amenities, comparison of the size of a home and etc. Further, an appraisal is a service independently paid for by the home owner and conducted by a professional independent third party, not a local government body that aims to set the tax rate for all of the town’s properties.
Never confuse a tax assessment with an appraisal because the numbers will not reflect the true value of a property.Tags: appraisal home value, difference between tax assesment and appraisal, home appraisal, real estate appraise, tax assesment, town home appraise, what is appraisal
This post was written by Joseph Castaneda