Home Buying in 08844>Question Details

cdjcty, Home Buyer in 07302

Can someone describe the relationship btw bldg assmt & land assmt vs. price?

Asked by cdjcty, 07302 Tue Dec 4, 2007

Specifically in Somerset county in NJ (if it matters)...for example, according to mls data, if land is assessed at 93k and bldg at 286k (total assmt = 379k), why would be listed @ 600k . this is a specific example but seems to be generally true for all listings. additionally, is tax calculated as a % of assessed value or price?

disclaimer: renter looking to be owner.

Help the community by answering this question:

Answers

7
Working as an Assessor, in a town that re-assesses yearly, I can tell you that even if a township reassesses yearly, the numbers aren't going to reflect the actual current market. But they will be close. A re-assessment and/or revaluation uses the prior year to calculate values. It's a long process. Towns that don't re-assess or go through a re-val have "ratios". As the market changes the ratios are changed to calculate the assessment to current market value. Always call the Assessors office to see when the last re-assessment/reval was and find out the ratios. Typically listings are higher than assessments
0 votes Thank Flag Link Thu May 15, 2008
Good Question, but they have no realtionship at all. The local governments assessed value is for county and or state tax assessement purposes only. "Market Value" is what a seller will take & what a buyer will pay and it is determined by the sales prices of homes sold in the last 90-days ( 90 in our local market ) in your neighborhood similar to yours.
0 votes Thank Flag Link Thu May 8, 2008
The only purpose of assessed values is to fairly share the tax levees accross the municipality. In theory, homes with similar assessments should sell for similar prices. Unfortunately, the reality is that the appraisers that make the assesments do not have much time per home nor specific knowledge of the interior. I would agree that looking at the assessment to determine fair market value is almost useless.

Remember, market value is the price that a "ready, willing, and able buyer is willing to pay". In essence, YOU determine market value. Realtors, appraisers, and other professionals give their OPINION based on a number of factors including: comparable homes that have sold, comparable homes that have NOT sold, comparable homes that are currently on the market, market conditions, and more. You can get this informations from sites like this, municipal records, and Realtors.

Feel free to contact me for more information.

Rafi Footerman
Mid Jersey Inspections
732-906-4100
NJ Home Inspection Lic. #076900
0 votes Thank Flag Link Wed Dec 12, 2007
For you folks in the greatest state of California, I'll use the New Jersey reply, "Forgetaboutit!" The assessed value is not even in my vocabularly!! We are initially "assessed" 1% of the sales price of the property as a basis for your tax bill. We then can only go up 3.5% of the TAX BILL amount yearly. We can also appeal under Proposition 8 to get "reassessed" if our values are going down. We are doing this a lot now!!! The "assessed" values of current "sales" are not even accurate as they can be 1.10 to 1.25% of the "sales price" for figuring tax assesment. Comps!! They rule! As a bit of self-promotion, I have the Chief Deputy Tax Assessor for Sonoma County explaining the Prop. 8 guidelines on my radio show blog listed below. It's in video format and he explains it in detail. It's "on-topic!!"
0 votes Thank Flag Link Tue Dec 4, 2007
Hello Chris, As explained very well by Marc in the preceeding response, the assessed value is the value given by the county or taxing authority appaiser for (1) land and (2) buildings upon the land. Each at taxed at a different mill rate. As Marc pointed out, properties are re-assessed (in his area 5-15 years) in our area ever 3-4 years and the appraisers use the Sales data obtained from the real estate data bank to re-evaluate property value in a specific area. The tax therefore is calculated by applying a 'mill ' rate on the new assessed value and coming up with a new tax bill. But as you've probably noticed, the tax due goes up every year, and that is because the 'mill' rate goes up every year. Although it's possible for the mill rate to do down, in my many years, I have not observed this phenomena. Hope this information is helpful.
0 votes Thank Flag Link Tue Dec 4, 2007
Ideally when a town assesses a house they are trying to do it at or near 100% of the market value at the time. However towns do not assess houses every year nor do they reassess at the time of the sale. Therefore every town's assessment is usually a rough percentage of the market value. Because of this I would not use the assessment as a way of determining the value of a property. Your best way to do that is with comparable sales of similar homes in the town.
0 votes Thank Flag Link Tue Dec 4, 2007
Hi Chris,
In reality, assessment is a tax concept and is largely irrelevant for a buyer looking at homes. Assessed values are computed every 5-15 years, and then are adjusted each year by a ratio to arrive at current value. However, the ratios are applied town-wide, are out of date, are based on property inventory cards that are never correct, and are just generally totally unreliable. So as a buyer, I would totally forget about assessment, because it means nothing in relation to real value. One house assessed at $379,000 could sell for $600,000, and another house assessed at $350,000 could sell for $800,000. It happens all the time.
0 votes Thank Flag Link Tue Dec 4, 2007
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer