Recently, when showing a house, we were asked why it was priced so high. Upon further explanation, the buyer couldn’t understand why the house was priced so much higher than its assessed tax value.
The buyer had looked up the house’s taxes (thumbs up for buyer research!) but didn’t understand why the house wasn’t listed at that value.
Well, here’s the difference.
Houses are listed at market value while assessed value is done for tax purposes.
Market value: This is how much the home could sell for on the current market.
Market value is the highest price likely to be paid for a property, assuming that the property was available to all potential buyers at a realistic price or a reasonable length of time. This amount can go up and down with the market. Most agents compare comparable properties that are active or have been sold in the past six months in the area to help come up with a price that the house could sell at.
Assessed value: This is how much the county assesses for tax purposes.
The assessed value determines how much your property taxes are. The county uses its own formula to come up with its number. When that assessed value increases, it’s not always a good thing. It means your taxes go up.
If you have any questions about what your house might be worth, contact us!