Home Buying in Alaska>Question Details

Rebekah, Home Buyer in Homer, AK

Why are home prices so much higher than assessed value?

Asked by Rebekah, Homer, AK Wed May 7, 2014

In my area home owners are asking anywhere from 60-140k more than the assessed value of their house. Why are the prices so different? Am I wrong to expect the asking price to be closer to the assessed value?

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Be mindful that assessed value is the value determined by the local tax assessor for the purpose of your yearly tax amount; market value can and should be defined as the price at which both buyers and sellers are willing to enter into a contractual relationship. Therefore before making offers review a market analysis with your agent.
0 votes Thank Flag Link Thu May 8, 2014
What a homes true market value is has no reflection on its assessed value. Most cities and towns re-assess every 5 years and some more. Others base the assessment on 80% of value while others may be 120%. The bottom line is market values are not equal to assessed value and should be used as a guideline for current value.
0 votes Thank Flag Link Thu May 8, 2014
Often municipal tax assessments are only done every so many years and then a multiplier is used to make an educated guess as to the value of the home. It is a very unreliable method. The only real way to estimate the current value of a home is to either work with a real estate agent and ask them to do a comparative market analysis, or to hire an appraiser to give you his opinion. Asking prices are based on current sales and that is the data used by real estate professionals and appraisers.
0 votes Thank Flag Link Thu May 8, 2014
Your not wrong, just misinformed. The tax assessed value is a broad guess for the purposes of collecting taxes. No one from the government inspects the homes and sees upgrades or deferred maintenance. The local agents track sales on a regular basis and sets listing prices based on the most comparable closed sales in the past 3 to 6 months.
Markets change faster than tax assessors can keep up with them. The assessed value is not what a home is worth, neither is the guestimate on Zillow, here on Trulia or other sites. They are all just approximates.
0 votes Thank Flag Link Wed May 7, 2014
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