How Home Sellers Can Uncover Your Home Value
When you are ready to become home sellers, you need to know how to accurately value your home. It seems like knowing what the value of your house is should be an easy process for home sellers. However, knowing the real value of your house means that home sellers need to know what type of value you are talking about.
Tax Assessed Value
The tax assessed value of your house is going to be determined by your local government. They have a set rate to determine what your home’s assessed value is so they can decide how much to tax you for your property tax.
Each local government is responsible for establishing their own rate. And it doesn’t necessarily matter what you paid for your house.
Here’s how it works: a local assessor is going to look at what you paid for your house, what the local comps are and if you have made any improvements to your property. Once they have all this information they will give your house a value, which they will multiply by whatever their assessed ratio is. Then, your tax will be calculated from this assessed value.
For example, if your house is valued at $200,000 and the assessment rate is 80 percent, then your tax assessed value of your house will be $160,000.
Tax Appraised Value
The tax appraised value is the technical name for the number that the local government arrives at when assessing the property. This is the number that is then multiplied by the assessed ratio in order to determine your property taxes.
Market Value
When you hear the term “market value” that is the price that is believed that your house would sell for. While the assessed values of the house are based on the government’s opinion of your property value, the market value is based on the opinion that buyers have about how much your house is worth. Simply put, the market value tells you what people are most likely willing to pay for your house.
There is no set calculation on how home sellers can figure out the market value of your house. In order to do this, home sellers must start by looking at the comps in the area. The goal is to see what houses have been selling for in your neighborhood so as to be able to understand what buyers have been paying for those houses.
When this exercise completed, home sellers will want to compare how your house stacks up against the others that have sold. From here, home sellers will adjust the price based on these differences in order to arrive at your market value.
If you are thinking about selling your house, you will want to research the market value of your house. This will help home sellers determine an asking price.
If you are buying a house, you will want to know the market value and the tax assessed value of the property. The market value will help you know what to pay for the house. The tax assessed value will help you know an estimate of how much your property taxes will be if you find out the local tax rates.