Assessed value a guideline for pricing strategy?
- Thread starter JackIce
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Most tax assessments are about 10% below true market value .. as a guideline .. and yes, maybe 20% in some cases ..
The main reason is that most cities do not have enough staff to deal with appeals. Thus, to limit the # of appeals they aim low. If they aimed for accuracy far more people would appeal their taxes, and most cities could not handle it.
Like any rule of thumb, it has to be verified with more due diligence in the real world, using a realtor's comparables or better, your own experience.
To become a serious investor in townhouses, for example, YOU must know very quickly what a 1450 sq ft townhouse with 3BRs and 1.5 bath facing NW on ABC street in average condition on a 30 x 130 ft lot is worth .. plus or minus 3% !
Example 2: two houses on the same street that look the same, were built around the same time and have the same size are likely assessed the same value, but one has now a finished basement, a brand new kitchen, new hardwood throughout and 2 fancy bathrooms .. and as such would be worth maybe 10% to 20% more than the other !
The main reason is that most cities do not have enough staff to deal with appeals. Thus, to limit the # of appeals they aim low. If they aimed for accuracy far more people would appeal their taxes, and most cities could not handle it.
Like any rule of thumb, it has to be verified with more due diligence in the real world, using a realtor's comparables or better, your own experience.
To become a serious investor in townhouses, for example, YOU must know very quickly what a 1450 sq ft townhouse with 3BRs and 1.5 bath facing NW on ABC street in average condition on a 30 x 130 ft lot is worth .. plus or minus 3% !
Example 2: two houses on the same street that look the same, were built around the same time and have the same size are likely assessed the same value, but one has now a finished basement, a brand new kitchen, new hardwood throughout and 2 fancy bathrooms .. and as such would be worth maybe 10% to 20% more than the other !
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This year in Edmonton we've seen assessments off by $100k on both sides for some properties. The best way to find the value is to have a relationship with a REALTOR who will help you and provide pricing information.
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[quote user=JackIce] Hello,
Can you tell me if assessed value is a guideline for pricing strategy? Should a seller expect to sell 20% over their most recent assessed value?
Thanks!
Personally, I wouldn't use assessed value for determining how much a property is worth. However, if you'd like to use assessed value, I have a great 2 bedroom condo with a long term tenant in place in an inner city Calgary neighbourhood that I'd be happy to sell for its assessed value of 339k.
You really have to do an analysis of the individual property, and I wouldn't recommend outsourcing that work to the city.
Regards,
Michael
Can you tell me if assessed value is a guideline for pricing strategy? Should a seller expect to sell 20% over their most recent assessed value?
Thanks!
Personally, I wouldn't use assessed value for determining how much a property is worth. However, if you'd like to use assessed value, I have a great 2 bedroom condo with a long term tenant in place in an inner city Calgary neighbourhood that I'd be happy to sell for its assessed value of 339k.
You really have to do an analysis of the individual property, and I wouldn't recommend outsourcing that work to the city.
Regards,
Michael