Many buyers have questions about the difference between assessed values, list prices and sale prices. Some facts to keep in mind:
- Assessed values are as of October 1 of the year past. List prices can fluctuate over the year, and if demand becomes very high or drops off in a certain neighborhood, list prices may go up or down accordingly. Also, a homeowner may have made updates after Oct 1, so the assessment does not always take into account all upgrades.
- Often the Township assessor is not able to get access to a home forcing the assessor to estimate. For example, for one of my buyers, I checked the Township's property tax record card to confirm the square footage for a home for sale in the Hills. The assessor had not been able to tour the home, so they estimated the basement was fully finished and based the home's tax assessment on that; however, only a small portion of the basement was actually finished.
- List prices and sale prices are also usually different. A tax assessment does not mean that an interested buyer will be willing to pay the seller's list price. In some cases, homes will have to have price reductions before it comes into line with market values. In other cases, there may be bidding wars where the sale price ends up higher than the list price.
I recommend looking at tax assessments only as a broad guide, because you cannot assume the assessment is the true current value of any home. Reviewing recent sale prices of comparable homes is the best way to evaluate whether a home's list price is reasonable, overpriced or underpriced.
If you are considering making an offer, or would like to know values of a specific area or neighborhood, ask a local real estate agent to send you the selling information for comparable homes that have sold in the past six months in the same area or neighborhoo of a home you like.
When I work with buyers, I often send them the listings from recently sold homes so they know actual current market values of comparable homes, by looking at location, pictures and sale prices. Ask your agent for this information, or feel free to contact me if you are not working with an agent yet.