Home Buying in Brookfield>Question Details

sunilknambiar, Home Buyer in Brookfield, WI

How do you compare sale price with Assessed price ?

Asked by sunilknambiar, Brookfield, WI Thu Jul 5, 2012

I'm finding two good houses to buy 529,000 and 539,000 ranges priced very aggresively - 20,000 - 30,000 lesser than the assesed price in 2011 ? What are the sales patterns you are seeing in brookfield - close to calhoun 1 mile around bluemound rd

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Assessed value is the assessors opinion of the value of the property on January 1 of this year. It is based on sales information from last year. Therefore, it is not current. Also, it is very general. The assessor probably has not been inside the house lately, if ever. Therefore, there is no reliable relationship between market and assessed value when values are changing rapidly.
0 votes Thank Flag Link Thu Jul 5, 2012
The assessment is the assessor's opinion of value typically as of January of the year of the assessment. Each municipality decides how often to re-access, although the state has some requirements that attempt to not allow them to fall too far out of line with current values. While prices were rising assessments were usually too low. As prices have come down, assessments have frequently been high, although somewhat distorted by the distressed sales. Most large cities use mass appraisals which have information about every property entered into a large data base. This mass appraisal automatically adjusts for differences between properties. Mass appraisals are not very good at evaluating condition or motivation in sales and therefore have a higher margin of error compared to an actual appraisal or broker's opinion. If you look at 2 properties in similar condition, in the same municipality, the assessment will usually do a reasonable job, showing the difference in value between the 2 properties which is the goal of the assessor. People in more expensive properties pay higher taxes. At the same time if one of those people is highly motivated, they may accept a lower price. You will rarely find 2 people with the exact some opinion of value or how to get there. It never hurts to get a second opinion, after all to error is human.
0 votes Thank Flag Link Thu Jul 5, 2012
Hi sunilknambiar,

The homes assessed value really has little to nothing to do with the value these days. The best thing to do is ask your agent to run a comparable market analysis. This is done by using other homes that have recently sold in the area. There is other criteria that goes into the final calculations, but that would be your most accurate account short of hiring an appraiser.

Good luck on your purchase.
0 votes Thank Flag Link Thu Jul 5, 2012
The purpose of an assessment is for a municipality to collect taxes and pay the cost of running the services they provide residents. There is no relationship between assessment and sale price especially now except to say that very very few homes in the 4 county area sell for as much as they assessment.
0 votes Thank Flag Link Thu Jul 5, 2012
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