After all, you know what you paid for your property. By taking into account its location, its condition, and the state of the economy during the period you’ve owned it, it should be easy to deduce its current market value.
Unfortunately, there is no simple tool for figuring out your property value.
The value of any given property is judged in two different ways, and for two different reasons. You’ll want to understand them both. There is the property tax assessment value, which determines the amount of property taxes you need to pay annually. And there is also the appraisal value, which determines your property’s actual market rate—in other words, the amount for which you can reasonably expect to sell your home.
Tax Assessment Value
If you have ever owned a home, you have also paid property taxes on that home. So, what exactly determines the amount of your property tax bill? Along with any exemptions you may qualify for, it is based on what is known as the assessed value of your property. In most parts of the country, your municipality will assess the value of your property annually, or perhaps every two or three years.
There are any number of variables a government assessor uses to determine the assessed value of your property, including its use, its size, the age of the property, and its location. It is important to understand, however, that your home’s assessed value is probably very far from its actual market value.
According to the National Association of Realtors, roughly 60 to 70 percent of all U.S. tax assessments don’t accurately reflect the market value of the property in question. This may have you ask: Why should any property owner concern themselves with understanding their property’s assessed value in the first place?
The answer has to do with the accuracy of your property tax bill. No one wants to pay more in taxes than they absolutely must. And yet if your property is currently assessed at a too-high rate, that could be exactly what you are doing. If you suspect that the value of homes in your neighborhood has decreased recently, for instance, you might want to consider having your property reassessed, especially if it’s been more than a year since your last assessment.
To determine how long it has been since your property was last assessed, contact your nearest real estate board, as well as your local tax assessment office. In Bucks County, contact the Bucks County Association of Realtors and the Bucks County Board of Assessment. In Montgomery County, reach out to the Montgomery County Association of Realtors and Montgomery County’s Office of Property Records. Ask them how often properties of your sort are assessed, and how closely they’re tied to the market value. In most municipalities, you can formally request a reassessment if you disagree with your tax bill.
In order to glean the answer to the question at the start of this article—How much is my home really worth? —you need to focus on its appraisal value. A home appraised at $200,000, for instance, can realistically be put on the market for $200,000.
Naturally, real estate companies often work with professional appraisers to accurately determine the value of homes or other properties their clients are hoping to purchase or sell. You can hire your own appraiser if you want to determine as accurately as possible the true market value of your home, although if you work with a competent Realtor, that is certainly not a necessity.
In most instances, Realtors work to determine a reasonable asking price by researching the sales of homes that are comparable to yours—and preferably located in the same neighborhood—through the MLS, or multiple listing service. By looking at, say, three homes similar to yours in size that have sold within the past few months in your neighborhood, an appraiser can determine with a fair degree of accuracy the fair market value of your home.
Aside from the all-important factor of location, appraisers will consider the number of rooms, bedrooms and bathrooms in your home, along with its lot size, the existence of a garage or decks, and the home’s condition and its age. If you choose to hire an appraiser yourself, expect to pay roughly $300 to $500 for the service.
If you need to go before your county’s assessment board, we would advise you not to go alone. The attorneys at Benner and Wild are experts at providing legal services to residential, commercial and industrial property owners appealing their tax assessments.
Contact us today if you’re ready fight for the proper value of your home.