What is Assessment?
Have you ever wondered how the assessor comes up with your property assessment? Here are answers to some commonly asked questions to give you a better understanding of how property tax assessment works…
When I bought my house, the bank ordered an appraisal. What’s the difference between a financial appraisal and a property tax assessment?
An appraiser values one property at a time. A property tax assessor values every residential property in their city, town or village which is called mass appraisal. Both financial appraisers and property tax assessors are responsible for estimating the amount someone could expect to sell each of those houses if they were put on the market.
How does an assessor value my home?
During a revaluation year, the assessor looks at your house and then find several other houses like yours in the neighborhood that recently sold. Then they adjust the selling prices for differences between those houses and yours and come up with an estimate of the market value of your house. During a maintenance year, the assessor maintains the assessment that was applied during the revaluation year, making adjustments for any changes that may have occurred to the property.
What if there aren’t many sales? How does the assessor calculate value then?
They calculate how much it would cost to build a new house exactly like the one we are appraising. Then they consider its age and condition in estimating how much difference there should be between that house as it currently stands as opposed to it being brand new. They express that difference in dollars and subtract it from the new cost. Then they add that amount to what they think the land is worth to come up with an estimate of the total property value.
How do they assess Commercial property?
Commercial property is different because people buying that kind of property want to earn money from it. So an assessor compares the amount people earn from renting out that property to the amount it sells for and use that comparison to value other similar property.
Does the computer come up with my home’s assessment?
Because the assessor places a value on a lot of properties at a time instead of one at a time, they use computers for some of the analysis. The computer is used as a tool but each value of each property is carefully reviewed by the assessor.