Often, the assessed value of a home is not even close to what the asking price or sold price is on a home. And often people ask, what does the assessed value of a home mean? Does it impact my home sale or purchase in any way?
What is Assessed Value?
Assessed Value is the dollar value assigned to a home by the town for the purpose of assessing taxes in the community. Every year the tax assessors office goes through their database of closed sales on homes in the community using 2 year old data to come up with home values. They apply their own factoring to get the value to a certain level that works for their purposes. Then they apply the town’s tax rate, which is usually around $12-$14 per thousand, to come up with a tax bill. The funds collected from these tax bills are spent on police, fire, school systems, etc.
Does Assessed Value Affect My Home Sale?
The tax assessed value has no affect whatsoever on a real estate sale, it does not impact the market value of a home, it does not impact the bank appraisal of the home, and it’s not used in setting an asking price when comparing recent home sales. The assessed value is just a number used by the town to determine the taxes collected from the community.
Sometimes the assessed value might be behind the current market values of homes when market values are rising as they are now. In a down market, the value might be above the actual asking prices of homes when the market is crashing. But, it doesn’t always happen exactly that way because we don’t know exactly how towns are coming up with their assessed values. We know they are using 2 year old sales data and their own modeling system to come up with the number, and the assessed value has no bearing on the sale of a home.
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