Assessed Value vs Market Value
- Thread starter Bindy25
- Start date
- Joined
- Aug 29, 2007
- Messages
- 2,042
My rule of thumb is assessed values mean next to nothing. MPAC is not accurate in it's assessments and is all too often to broad in the assessment base.
Comparables are the only true gauge of current value. Aside from seller desperation. A property is worth only what someone is willing to pay for it.
Comparables are the only true gauge of current value. Aside from seller desperation. A property is worth only what someone is willing to pay for it.
- Joined
- Aug 30, 2007
- Messages
- 13,881
Generally assessments are below market value to keep the # of appeals low as the assessment authorities do not have the man power to deal with too many appeals.
- Joined
- Oct 22, 2007
- Messages
- 2,803
Any "rule of thumb" will depend on the municipality and the state of the real estate market. For instance, a few years ago in the Edmonton market, properties in good condition were selling for around 10 - 15% above tax-assessed value. This is by no means accurate and is subject to change without notice, but can be helpful information nonetheless. Your realtor may know what the current rule of thumb is for your area.
As for accuracy, the property that I bought at that time had been incorrectly assessed at $394k. I figured it should have been assessed for around $310k and we paid $335k for the property. When we got the new assessment a few months later, it was for $315k.
As for accuracy, the property that I bought at that time had been incorrectly assessed at $394k. I figured it should have been assessed for around $310k and we paid $335k for the property. When we got the new assessment a few months later, it was for $315k.
I had my home appraised in 2012 for $340K by the bank. The assessment agency assessed teh same house in January 2013 for $380K. I could have - should have filed a complaint - but I grow weary of ever rising costs and I am beginning to get tired of complaining about it. 
Whoever coined the phrase "taxes and death" being the only life certainies knew what he or she was on about.
Whoever coined the phrase "taxes and death" being the only life certainies knew what he or she was on about.
- Joined
- Aug 29, 2007
- Messages
- 2,042
Paying to have an assessment for a bank and having MPAC determine a value for tax purposes is comparing apples to oranges.
An assessment will almost always be lower as the assessor knows it is for the bank and will always error on the side of caution. Assessors all know what the banks expect. I would not be surprised to hear the assessor looked up the MPAC value and knew the bank would expect a lower assessment. This reduces the banks risk in providing a mortgage.
MPAC on the other hand takes an average of similar homes previously sold and comes up with a number. Many variables cause this number to be on the high side as it does not take into consideration interior finish/upgrades, landscaping, and street location etc. of the higher selling homes in the average.
An assessment will almost always be lower as the assessor knows it is for the bank and will always error on the side of caution. Assessors all know what the banks expect. I would not be surprised to hear the assessor looked up the MPAC value and knew the bank would expect a lower assessment. This reduces the banks risk in providing a mortgage.
MPAC on the other hand takes an average of similar homes previously sold and comes up with a number. Many variables cause this number to be on the high side as it does not take into consideration interior finish/upgrades, landscaping, and street location etc. of the higher selling homes in the average.