Home Buying in Norristown>Question Details

Rebecca, Both Buyer and Seller in Jeffersonville, PA

What does assessment mean when home buying? If assessed at 42,000 but is listed at 199,000 is that bad deal?

Asked by Rebecca, Jeffersonville, PA Mon Jun 15, 2009

Our home is up for sale and while searching we found a new construction home that needs minimal finishing, but was assessed at 43,000 according to TREND website from our realtor, but asking price is 199,999..is this figure only for tax purposes? We haven't gone to look at it yet..but just wondering why the assessment is so low?

Help the community by answering this question:


Hello Rebecca,

If this is a new construction home my best guess is that the assessment is based on the land only and not with the building. When you purchase new construction the taxes based on land are used and the taxes with the land and building are estimated. "Normally" the new assessed value comes in at 10% under the purchase price. In this situation be sure you have good representation so that they can find out the milage of where you are moving to give you a good estimate of what those yearly taxes are going to be.

Be sure you are represented when you go into New Construction. The site agent represents only the builder and since it cost you nothing to have representation it is always best to have a buyer's agent with you when FIRST entering the new construction site...even if it is only to gather information.

Jennifer Daywalt, Realtor
Re/Max Results Realty
Collegeville, PA
Top Realtor 2004, 2005, 2006, 2007, 2008
610-999-7693 Direct
610-489-7355 Main Office
2 votes Thank Flag Link Mon Jun 15, 2009
Hi Rebecca,

When buying a home, the number you need to worry about is the appraisal value, not the assessed value. The terms appraised value and assessed value are frequently used interchangeably by home buyers and sellers, but the differences make for an apples and oranges type of comparison.

Appraisal :

An appraisal value represents the fair market value of a house based on comparable sales, condition and location of the property, size and number of rooms and type of construction.
Appraisals are normally done in connection with mortgage financing and the number used is a base to determine how much money to lend. Banks and mortgage lenders don't want to loan out more than a property is deemed worth by their appraiser.


An assessment is the value of a house as determined by the town or city tax assessors, who use a formula based on recent sale prices of comparable homes and the area’s “equalization rate”, which is the ratio created by the difference between assessment and market value. For example, if the market value of a house is $400,000, and the assessed value is 200,000, the equalization rate is 50 percent.

Sometimes the assessed value (for taxes) and the appraised value (for the mortgage loan) may be close, but don't count on it; especially if the market has been through some fluctuations or a property has been improved through renovations or additions that have not been reflected in the current assessment. Therefore, an assessment is probably not a good benchmark for a house's value because of a possible time lag since the last assessment, market fluctuations, and variability in assessing practices from community to community.

Good luck with your home purchase!

Susan Meyers
Weichert Realtors
2 votes Thank Flag Link Mon Jun 15, 2009
Does it mean that if the assessed value is more than the selling value, the property is being sold below par value? What can be said about such a scenario?
Flag Sun May 11, 2014
i plan to buy i house and i already offer for the house 330.000.but the assessment is 239.200.is it good or bad deal?
1 vote Thank Flag Link Fri Oct 19, 2012
thank you, it is new construction, and my selling agent is also my buying agent, so yes, she will be there..I have hope that this home is still a great home even though the assessment is very low :) it does have a 1/2acre with it so maybe the land is taxed not the home?
0 votes Thank Flag Link Tue Jun 16, 2009
It is not unusual at all for the assessed value to be considerably lower than the appraised value. The assessment value is strictly for tax purposes.
0 votes Thank Flag Link Tue Jun 16, 2009
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