As far as the assessed value is concerned, it is set by the city or county government to collect the maximum tax they can. After all they have to finance their senseless spending. So I believe, that at least for the year that the property was assessed in, it should be the maximum money that you should pay for the property.
The listing price of a property needs to be based on comparable sales in your area but even more importantly, reflect the competitive situation in your market (one tells you what's happened in the recent past, the other tells you what's happening now.) If you have a highly desirable property with little competition, you may be able to price one way. But if your property is less desirable then the competition, or there are lots of similar properties on the market, you have to price (and stage!) your home to be the one that buyers feel compelled to buy over your competition. You also have to be prepared to react to the market quickly. What I find in Boston is homes that are prepared, priced, and marketed correctly can still sell very quickly. Those that don't tend to hang on the market for months.
I would also agree with Michael Grimes - you need to be aware of how your price compares to assessed value vis-a-vis other properties on the market and react accordingly. If most properties are priced over assessment and yours is under, you can use that as a marketing plus. If it's the other way around, you need to be able to explain why that is.
Hope this helps!
Hope this helps
The one instance assessments might cause issue is if the buyer agrees to pay significantly more than the assessed value. In this volatile banking market the bank might feel uneasy about lending when the buyer is "over paying," and as a result not deliver a commitment.
Although the other agents have good points, I disagree. I think it is good for the seller if the listing price is close to assessment because it presents value to a buyer- it helps the price of the home seem "not inflated" if they feel they are buying the true value of a home. Assessment is the value of the land plus the value of the structure - by the town.
A year ago, in a different market, assessments were a very different number than market value, however in this market, buyers are looking for a price closer to or even under assesment. For this reason, I think assesment is now playing more of a part in the market.
If the house sells below assessmant, you can ask the town to re-assess the taxes, but there is no guarantee.
I hope this helps. Good luck.
The easy answer is that assessed value has nothing to do with the value of the house. The truth is that we are in a buyer's market and it is one of the first things that an uneducated buyer looks for when searching online for homes. With today's technology, many buyers are waiting until they have located a home before hiring an agent to represent them. It is for this reason that you should have some idea of what the sale to assessed value ratio is on comparable homes in your community. If your home has a much higher ratio, then you need to address the differences in your marketing. Pricing homes is very difficult in this market. Once you arrive at a price you need to listen to the market. If you get constant showings but no offers then you need to react. If you get no showings and you feel that the property is being properly marketed, then you need to over react! Best of Luck.
One Example. I have one property listed right now that was assessed by the county for $663,000 not more than 20 days ago. The property is currently listed at $329,000 and has been so for 79 days. It is simply not worth anywhere near $600,000 dollars.
There are two different goals and objectives for each activity. One value is determined for the purpose of selling a property on what people will actually pay? The other value is set to collect tax revenue.
A better gauge is the past 3-6 months of market activity for like properties in close proximity.