“What’s my home worth?”
Even if you are not in the market to sell your home, your home is a sizable investment and it is natural to ask the questions: What is my home worth?
This simple question is often answered three different ways.
- Ask your public tax assessor, and you’ll get one number. This number is typically low.
- Look up your house on Zillow and get a Zestimate and you’ll get another number. This number is typically inflated and is too high.
- The third answer is market value. This is the value your house should sell for, typically within 30 to 90 days.
Many people are confused about assessed value versus market value. Assessed value is a number placed on a property by a public tax assessor for the purposes of calculating the property taxes that you pay on your home each year. Depending on the tax rate in your area, the assessed value is used to determine your annual tax bill. The rules for the assessment vary, but typically the assessed value has more to do with how much money the municipality needs to raise than it does the number you’d arrive at after putting your home on the market.
Assessed values are only adjusted annually and can lag behind true market values in both directions. In addition, they can vary widely from home to home in the same neighborhood, especially if a neighbor has appealed an assessment (usually for the purposes of lowering their tax bill). In case you were wondering, assessed values don’t automatically adjust for you when someone else appeals their assessment.
Market value is the price at which a specific house, typically within 30 to 90 days, in a particular location in its current condition will sell. Your real estate agent will try and predict the market value of your home based on all of these factors. If you live in a hot neighborhood, your home value can be elevated. If you have significant repairs to do or other condition issues, your market value can be lower. The number one reason a home doesn’t sell is often related to a disparity between listing price and true market value. (Overbidding occurs when a home is priced below market value.)
Generally, assessed value tends to be below market value. Sometimes a buyer will attempt to negotiate a lower price on a home by citing assessed value, but this only underscores their lack of understanding about assessed value versus market value.
The USA Real Estate team is well versed in the Prescott area housing market, the team would be happy to chat with you about the ever changing housing market. Contact USA Real Estate at (928) 775-0400.