Monthly Archives: December 2012
Should I use the tax value of my property to determine market value?
The short answer is no. The tax office will use formulas based on age, size of property, and location to determine the tax value. The formulas cannot be specific to a particular property, so often tax value are higher or lower than true market value. The formula can miss on several important factors that actually determine market value. Some of these are the following.
- Location – How active in terms of homes sold is this subdivision? How many houses are for sale in this area? How many have sold there in the past six months.
- Condition – If an older house, 20+ years have updates been made to the interior? Kitchen or baths? Is the roof original? Has heating and air conditioning been replaced? A small older property with a totally remodeled interior will have a higher market value than tax value.
- Floor plan – Does the floor plan compete with new houses? Often a term appraiser’s call functional obsolescence will come into play. A property may have more size than a newer home, but the floor plan does not appeal to today’s buyers. Example: living room and family room. Often the extra space, although important in a “tax appraisal”, does not increase value in the market.
The only way to clearly see your value is to compare your property to current sales, and competing homes to see where your house should be placed in the market. This can easily be accomplished in our office. You will be able to see on a large screen TV in comfort the interiors and exteriors of houses sold and for sale. This will show you where your home should be priced. After all, it is your home, and your decision.