The assessed value is calculated by your local town without every having visit the interior of the home. One town may be assessing a home at 100% of value, while the neighboring town may be at only 50% because they haven’t reassessed in several years. The asking price on the house is either a private seller’s estimate of what their own home is worth or a Realtors calculation based on recent activity.

The two numbers are like apples and oranges and, in the Eastern Delaware County section of PA, it is difficult to try to determine how to price a house or what to offer on a house based solely on the assessed value. I am not sure that it should even be factored in.

Assessed value is a relative comparison of what houses in close proximity offer so that they can be taxed "appropriately" and "fairly". The relevance is quickly lost between houses which are several blocks apart or in neighboring zip codes. Neighboring counties seem to use different bases for these numbers further diminishing any comparison.

It would be easier if there were a more "universal" system but there are so many variables between different areas that a "universal assessment" would have little merit.

Some argue that sales prices could be used for the assessed value but doing that would have many unintended consequences.

A local Realtor should be able to provide some insight as to how their local assessment was determined.

In Western PA, alot of times there are substantial discrepencies between the listing price and the assessed value. The tax assessors do not visit the insides of the homes. And most homeowners want to keep it that way. Keeping the taxes lower (and the assessment lower) makes the property more appealing for a propspective buyer.

While an obvious reassessment would be in order as of the closing date, many borough and townships are known for not following up. Other townships, though, are known to serve you with a reassessment letter within days of your closing.

It all depends on your location.

In California, my encounters with asessments have been fairly accurate to the market value.

Harry,
There are 3 prices to a house, 2 are similar one is absolute.

The 2 that are similiar, Tax Records, In GA most people will challenge their home priced by the County, saying it is not valued that high to avoid paying higher monthly taxes. This is similar to the buyers mentality when placing an offer. The same home owners will then contest every penny of their value against the market, Compltely ignoring their tax challenged asessment.
The county appraisers have a standard sqaure footage and improvement calculation that their adpot, hence their calculation.
Now the absolute and reason for difference. Your true home value at time of sale is" What someone is willing to pay and what you are willing to sell for Period" Because this is not a constant even in neigborhoods. I find out of town non local approved lenders representing out of State Buyers, who may not asess the property correctly, this muddys the waters even more.
You need a good local Realtor who can give you an accurate market value and a Good local appraiser who can find you 3 hard and fast compariable properties to yours and make adjustments up or down for your property. This will be the best money you spend and can make or save you thousands

Harry, for a home you are looking to purchase I would say have a Realtor (buyers agent) do a CMA (Comparative Market Analysis) to determine the market value. That is the best and most accurate way to determine the value of a home.

Hi Harry:

In the state of New York, a property's assessment is based on its market value, which should be how much a property would sell for under normal conditions.

NY assessments are determined by the assessor.

The assessor can estimate the market value of property based on the sale prices of similar properties; they can also decide the value based on the depreciated cost of materials and labor required to replace it. There are different rules for assessing commercial properties.

After determining the value of a property, its total assessment is calculated by multiplying the market value by a predetermined percentage for the municipality; which should be the same within the municipality.

So, the assessed value can be determined by market value or by the depreciated cost of material and labor required to replace it. As this is done by assessor with limited resource, the result might not be as accurate.

In addition, your wonder about how close it is to the ASKING Price. Remember that an asking price is just that - 'asking' price, it may or may not reflect the real market value of the house. That might be another discrepancy in what you see.

Sylvia

The assessed value is based on what the homeowner paid for the property plus a 2% a year increase (California).

When you see the assessed value it has nothing to do with the current value of the property or the asking price. I know this may sound a bit confusing.

If the homes were purchased a long time ago, they may not have been assessed in a while, and so the assessment may be based on old values.
If you go down to the courthouse, someone there can explain how they come up with the tax basis. Some places, you can go online, but I strongly reccommend "going downtown". This way you can meet with someone and get alot of questions about an area, not just a particular house answered, such as "how many of a particular type of home sold", etc.

The county ultimately assesses the property at the sales price. So if the home sold in 2001 the assessed value was based on what the buyer paid for it in 2001 plus what ever increases are allowed by law per year plus voter approved bonds. Has absolutely nothing to do with market value. Could be the property was purchased at the height of the market and you buy it for less. The new assessed value will be based on what you paid for it. The assessed value is the basis for property taxes, only.

The best way to determing how the assessment was developed is to visit the assessors office in your local community. The Assessor will be able to show you how they arrived at their figure. It is alway a good idea to evaluate the file the assessor has on your home so that you can point out any errors such as over stated square footage or ammenities that you home may not actually have.