Tax Assessment Value Vs Price it Will Sell for?

Question

Hey I have heard that the tax assessment value is always lower that what a house would sell for in good condition? Is that true?  Do they always assess it for lower than it would be worth renovated? Has anybody had any experience selling a house that wouldn't sell unless you made it available for less than assessment value?

Jeff Copeland · Answer

This will vary from market to market, and county to county, depending on your property appraiser/assessor.

An easy way to answer this yourself is to:

1. Look at several recent sales (less than six months old) in your market or farm area

2. Look up the assessed value, and see how it compares to the sale price.

There my be no correlation. But then again, you might start to see an obvious pattern. In my market, renovated homes typically sell for 40-60% more than the assessed value, so it can actually be a very useful screening tool when looking at properties - I know that I can look up the assessed value, multiply it times 1.4 or 1.6, and get an very rough estimate of the ARV.

Russell Brazil · Answer

There is typically no correlation between the 2. The assessment is not always below the market value. No correlation typically.

Leon Chappell · Answer

@Jeff Copeland Wow if I can find a pattern like that in my market it would definitely be beneficial during the screening process.  Thanks for the advice.