Should the asking price and the value that a city has assessed the property at for property taxes be somewhat in sync? Is something off if there's a difference of say $20K?

Nope.  That really shouldn't raise any red flags.  It could be because that property hasn't been reassessed recently.  It could be that the taxing authority uses a lower % of "fair market value".  It could be that their source of "fair market value" simply doesn't represent the current retail market, which can fluctuate wildly and rapidly.

Tax assessed values are generally based upon a % of "fair market value".  Think of fair market value as the book value of a stock.  Many stocks - think Apple, Microsoft, Google, etc. - trade at many multiples above book value.  Retail price is based upon what people are willing to pay, not what the property is actually worth.

Now, since we're talking about real estate investing, it's important to note that if the asking price is significantly higher than the assessed value, it wouldn't be much of a deal in my market.  It could be different in CT.

They can be wildly different. Some places it could even be around half the market value. The assessment value is just a tool for calculating property tax. The assessed value will have no bearing on the appraisal.

I agree w/the above replies. In CT, the assessed value is 70% of the alleged Fair Market Value of a property. Note that I said "alleged." Basically, an assessment is nothing more than what a municipality decides a property is worth in order to tax it based upon that value.

Additionally, although cities and towns are mandated to perform assessments regularly (in CT they're supposed to update assessments every 5 years), that assessment can still be quite old and outdated. Think about the difference in value between 2006 and 2011, for example.

We'll use the assessed value sometimes when running comps. In addition to our regular criteria comparing size and style of house, bed/bath, acreage, age, etc, we might toss assessed value in there just to see what comparably assessed properties are selling for.

Another way I've used the assessment is to calculate a ratio of assessed value to sales price. Is it 1.3, 1.5, etc ... and this can help me in my comps as well, not to mention that it gives me an added tool I can give to an appraiser. It's a good way to see what's going on in a particular town.

And @Hattie Dizmond  it can be a little wacky in CT! I've seen properties sell for double the assessed value. Or below assessed value. It's kind of all over the place.

Thank you! This clears up a lot. The explanations are clear. Thank you so much.