When you are about to sell your home, you will get the help of a professional and assess the value of it. This is where you will figure out that the assessed value of your home is different from its market value. This can be quite confusing. That’s why we thought of sharing the reasons on how the assessed value of your home can be different from the market value of it.
How is the assessed value calculated?
To get a better understanding on why your assessed value is different, you need to understand how the assessed value of your home is calculated. The main factor that determines the assessed value of your house is the cost that is required to rebuild your house. To calculate this value, the assessors will be considering the current material and labor costs.
Moreover, they will be considering the income that can be generated through leveraging the property. In most instances, the assessors are comparing your home with other similar properties located within the neighborhood as well. If you have done any recent renovations, you will effectively be able to enhance the assessed value of the house.
A computer program will be able to provide the baseline of assessed value. Then the assessor would pay attention to it and adjust the value as necessarily. This is where the knowledge and expertise of the assessor would come into play.
- Do not assume the assessed value of your home reflects its fair market value.
- Do keep renovations in consideration. Most times, the assessed value will not take home renovations or improvements into consideration.
- Do consider ordering a private appraisal for your current or future home.
- Do consider hiring a Realtor to evaluate the home and compare market statistics to best determine fair market value.