I'm well outside of the area of the country that you are looking at, however there are 3 "values" in Real Estate that are discussed:
1.) Market Value = the value (price) that a unpressured buyer and unpressured agree upon.
2.) Appraised Value = The value of a property in relation to the amount of financing that a lendor is willing to provide. The appraised value needs to be enough to cover the lenders exposure. Something like collatoral but not really. In todays Mortgage Market, I see appraisals that are very conservative in an effort to correct the liberal appraisals of the past and the impact that they have had to the Mortgage Companies that have seen a higher rate of foreclosures.
3.) Asspessed Value = the property value used as the basis for Real Esate or property taxes. This is a local government value and there can be a VERY, VERY wide variance between similar properties. The reason for this is the long period of time between complete (every property) and consistant (short time frame and valuation perspective) re-valuation. There are Counties in NJ that have gone through the re-valuation process within the past 3 years. Appraisor went to nearly every property, entered nearly all and "appraised" each at what was then "100% market value". Appraised value is closer to market value in these instances, HOWEVER, I use appraised value simply and solely as a data point when doing a Market Analysis due to a lack of 100% accuracy on a properties interior amenities.
Again, Market Value is what a ready, willing, unpressured buyer and a ready, willing able and non-pressured seller agree upon.

In Florida where I work, County Tax Assesor's property assesment is always off the market value. In most cases, assesment is lower than the current market value if property was purchased before 2004 real estate boom. If property has been owned by same person for long time, difference could be huge due to Florida's Homestead Property law which caps assesment to 3% per year..... For properties purchased and closed after about June 2004 assesment values are generally higher than the current market values of homes and condos due to declining market prices.... Best way for you to find out is to have your Realtor do a detailed Comparative Market Analysis (CMA) on a home you are interested in purchasing. Then you will have a better idea about submitting a reasonable offer.

Aa,

A tax assessor's appraisal is usually just a "drive-by" appraisal. They don't typically take into consideration the improvements you've done to the property. A CMA (comparative market analysis) will be much more accurate and will tell you what homes in the area are selling for in the area. An appraisal by the institution you'll be getting a loan from will also let you sleep at night knowing you're not paying more for the property than it's worth. They probably have claimed homestead tax exemption on it lowering the tax value and could have some other exemptions as well. Your Realtor can look this up for you.

Happy to help,
Terri Hayley

I never care about the tax appraiser's value for the most part. More often wrong than right on the money. $50,000 off is not unusual. The biggest risk is that the property might be reappraised next year at the higher value and your taxes will therefore go up. Of course if you were planning on spending X and the other properites were properly valued by the tax accessor then you'd be paying the higher amount anyway. It just means you might get a free ride this year. Bank appraisal is completely different. Tax office has likely never seen your property, certainly has not been inside and is valued by mass appraisal. Bank appraiser likely at least looks at the outside and potentially the inside too.

I wouldn't rely at all on the tax assessors appraisal. I have sold homes for $100,000K more or thousands less than the county appraisal value. Here in Brazos County we typically, a few years ago, take the county appraised value and add 20% to get approximately what fair market value was. Currently they are closer to the actual market value, and sometimes over. What we have found, however, is that properties that are out in the country, are older, or unusual in any way, are appraised at much less than fair market value whereas properties that are in newer subdivisions are taxed, at times, too high.
Get a comparative analysis so that you can ensure that you are not overspending. You'll also have the backup of a bank appraisal.

What you state is common. Assessed value has little to do with market value. The differences can be based on several factors. Lately, taxing authorities have started using sales data, but the assessments still come in lower for the most part. The likely reason for this is political.

In Texas we receive a homestead exemption therefore the property tax we pay are less.... than the true appraised value. If the property is owned by a person 65 or older they have additional exemptions.

http://www.lynn911.com

The best thing to do is get a Comparative Market Analysis on other homes sold in the area. The report will give you specific information to analyze the home you are referring to.

You can get a report through my website, and others. Also you can view homes free using our MLS searching tool on line.