City Assessed Value: a poor way to determine market value

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Why Home Sellers should NOT rely on City Assessed Value

Kudos to home buyers, who are educating themselves on the entire home-buying process.  Lately, several prospective buyers have told me that the “City Assessed Value” for a home they are looking to buy is “X”.  This information is obviously available to the public, but should be taken with a huge grain (lbs?) of sale.  Here is how the conversation usually works:

Agent: “So now that you’ve seen the home, what do you think?”

Buyer: “I love it but isn’t it overpriced?”

Agent: “What makes you think that?”

Buyer: “The house is listed at $479,900  but City Assessment shows it to be only $435,000”

 

Why City Assessed Value should not be relied upon

Let’s get right to the point: City assessed value in most cases, has no link to actual market value!  WHY?  Ask yourself this:  When was the last time that a City Assessor was INSIDE your home?  The answer is probably NEVER  (Thank goodness, right?)

So when the city publishes it’s assessed value for your 1,550 sq ft two-storey home in LindenWoods, they take an average of what other 2-storey homes of similar size and location have sold for.

Have you made recent upgrades that the City does not know about?  Or perhaps your home is in need of updates, and you’re still enjoying the carpets and blue bathroom fixtures from the 70’s.  Either way, the City would not know what the inside of your home is like, and therefore the buyer or seller should not rely upon the City Assessed Value to be an accurate reflection of Market Value.

Here are some real-life recent examples:

House in Amber Trails:   City Assessed Value of $435,000     SOLD for $466,000  ($31K OVER)

House in St. Vital:    City Assess Value of $318,000   SOLD for $288,000  ($30K UNDER)

House in St. Vital:    City Assessed Value of $314,000     SOLD for $348,000   ($30K OVER)

Proper way to establish value for your home

Before putting your home on the market, work with your licensed and experienced real estate agent to set a proper listing price.  I recently took over a ‘Private Sale’ where the company had suggested a completely unrealistic price, based completely on City Assessed Value.  6 weeks later, the frustrated home-owner called me to take over the listing, and after making a small adjustment, the home sold in 3 days.

Moral of the story:  Don’t rely on City Assessed Value to set your listing price.  Call and work with a professional real estate agent,

 

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