Kansas City Real Estate Thoughts... Unless the county has their check book out and is willing to pay you the tax assessed value for your home, then that is not the market value of your home. Often times the tax assessed value doesn't even provide us a good approximation when working to arrive at an appropriate list price or offer price. In fact homes very often sell for much more or much less than the home's tax appraised value, so when representing a client, I tell them to spend no more than a few moments considering the county's tax appraisal. It might be beneficial if you are looking at trends across a community but there are tons of more current, more detailed and more applicable information that sellers and buyers should consider when it comes to pricing. Of course tax appraised values are necessary because they are the basis for which we pay property taxes and support our area's infrastructure, but they unfortunately often give an inaccurate depiction of a property's value. The real value of a home is the price at which it sells on the market, but since a home doesn't sell every year the tax appraiser must start making judgments. The tax appraised values become more suspect because the county can't justify the cost of setting up an appointment to view the inside of every home. It seems the most accurate tax appraised values are the ones I see about a year after a home is sold. But that's simply because the county has adjusted the appraised value to match the price at which the home recently sold. And this doesn't help me at all since I could have simply gone into MLS to see the price at which the home sold, if that's what I was needing. The Johnson County Kansas Appraiser's Office web site informs us that "Sales are not the sole criteria of fair market value but will be used along with other factors". What I see time after time is that a home's taxed assessed value does end up being the price at which it sold (if that happened in the previous year). This is good in the short term but even in the best case scenario this information may already be up to a year outdated by the time you are viewing it. Also keep in mind that the tax appraised values are determined by at most an external view of the property. The Johnson County Kansas Appraiser's Office web site states "The cost of interior inspections would be prohibitive to the taxpayers of Kansas. Also, the security and well-being of the county personnel and the privacy of the taxpayer are of importance. Finding a suitable time for both the taxpayer and the county to arrange for the inside inspection is an additional problem". So this means that they don't know if you have cardboard countertops or granite, old vinyl or new marble. This alone tells us to not put too much stock in the county's tax appraised values. The county's web site also concedes that there are factors that could cause tax appraisals to be off including variations in square footage and condition. Additionally the site states "... your neighbor's property may be valued too low instead of your value being too high. The goal is to value all houses at the value they would sell for on the open market. Reappraisal is an ongoing process where both undervalued and overvalued properties are being adjusted to their market value". I have seen the stated square footages often vary by 10% or more. If the county measures the perimeter of your home they have an idea of your square footage but they can't know how exactly how much of your home is finished. Just one example of this is the area that may be finished over a garage - on some two story homes the second floor over the garage is completely finished. On others it is partially finished or not finished at all. Since a standard two car garage is around 400 square feet, that's a lot of square footage above that could be misjudged. On a basement that has been finished, in many cases there is no way the county can know how much of the basement is finished. It might be 400 square feet or 1,400 square feet. I firmly believe that is why more often than not the listed square footage for a finished lower is a round number like 500 or 600. Thus appearing to be a blind guess. And in many cases the county isn't aware if a basement is finished. Now as sure as the sun and gasoline prices will rise, the county will eventually find out about your finished basement. But it may take a while and during that time the home's finished square footage (and taxed assessed value) is clearly further out of whack. So I view the tax appraised value as simply that - the tax appraised value. It's not the actual market value. The best thing to do when buying or selling your home is sit down with a Realtor who will go over your area's market stats, including the market history, your current market, and what might be expected going forward given the current market conditions. Should you be curious to see your - or your neighbor's - tax appraised value you can do so here... http://land.jocogov.org/default.aspx
If you have any additional thoughts or info that supports or refutes this information you are welcome to share it!
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