I often hear homeowners say, “Well, my house is assessed at X amount, so I could probably list it right around there.” And then comes the question, “So what is the difference between the assessed value and the market value anyway?”
The assessed value of your home is used to calculate your property taxes. This value is determined by an assessor, assigned by your county or municipality. The assessor comes up with your home value, based on reviewing the recently sold properties nearby, the size and location of your home, and it takes into consideration any updates that have been done, according to county permits. Those updates are determined by the building permits that have been pulled for remodeling, additions, et cetera.
The assessed value of your home is public knowledge, contained in property records. Most likely, an Assessor will never, ever step foot in your home. The valuation is based on an exterior review only. It’s actually very common for the assessed value to be lower than the market value. So it’s important to always consult with a professional before listing your home for sale to help you determine what price would be appropriate for a list price. You want to make sure you’re not underpricing your home because you’re only taking the assessed value into consideration. Another thing to consider for a tax assessment is local counties or municipalities perform tax assessments at very different intervals. Take Amelia County, it typically reassesses every six years, whereas Chesterfield and Henrico counties reassess every single year. Thus, the market value to assessed value, it can vary greatly.
The market value of a home is determined by a variety of characteristics. These include the location, the square footage, lot size, the number of bedrooms and bathrooms, the condition and quality, as well as the finishes, such as appliances, flooring, kitchen and bath updates, and any other specific home features. The market value also takes comparable homes into consideration by looking at what is currently for sale and what has recently sold in the neighborhood. Supply and demand determine whether or not it is a buyer or a seller’s market. This means how many homes are for sale versus how many buyers are buying them. After compiling all of that data, you can come up with an accurate list price for your home. The actual market value will be decided based on what a buyer is willing to pay for the home and what the seller agrees to sell for. Another thing to keep in mind, if you’re looking at sites like Zillow to figure out what your market value is, you might want to get a second opinion. Many times, the Zillow value is unrealistic and either much higher than what your house could reasonably sell for or much lower. Since Zillow has never been inside your home, they are generating your value based on neighboring homes that have sold recently and the rest is just data gathered by a computer and ultimately, spitting out an average price.
I’m Anita L. Williamson, Helping You Establish Roots In Central Virginia.
