How Do Assessed Value and Fair Market Value Differ?

by April Stirling 12/01/2019

Two terms that you may have heard when talking about real estate is fair market value and assessed value. These two terms are not the same or even interchangeable terms. 


The assessed value of a home can often be higher than the price the house is being sold. These properties can often be seen as a “bargain” in the real estate community. The problem is that this is often a red flag. The property may be overassessed by the town which means the taxes are higher than necessary. 


Homes can also be listed at a higher price than the assessed value. Contrary to popular belief, a low evaluated cost doesn’t mean that the value of the home is less than the asking price. The asking sale price for a property is based on many factors, none of which are what the town deems the property is worth. 


Fair Market Value


Fair market value is what a buyer is willing to pay with no outside influence. As a homeowner, the best way to determine the fair market value of your home is to look at what’s real estate agents call a “Comparative Market Analysis” or CMA. The agent will look at similar properties in the area that have recently sold- generally within the last six months. This analysis will often include things that the assessor doesn’t take into account when pricing a home.


The Appraisal


When you buy a home, and the appraisal is done for the lender when the buyer is obtaining a mortgage, the purpose is specific. The lender is protecting themselves and the buyer. The lender wants to be sure that the property they are lending money on has a value greater than or equal to the purchase price of the home. Appraisals are also done in this manner when homeowners are refinancing the house. 


Challenging Assessed Values


Often, homeowners will buy a property and then later challenge the assessed value of a home for tax purposes especially if the owner feels that the assessed value is worlds apart from the fair market value of the home. If you believe that the assessed value is out of sync with the fair market value of the house and out of line based on the values of another home in the town, you need to file what’s called a tax abatement. Your city or town hall has all of the necessary information for submitting these forms. From there, each city and town has their own timelines for how long the tax assessor has to address this.                  

About the Author
Author

April Stirling

My business is to know the Connecticut Real Estate Market from Simsbury to Madison and all points between! 

Condos, single family homes, cottages, mansions, land or developed property, woodlands, beach or in town, 

I have sold it and I can sell yours!

My business philosophy is simple - I take care of my clients!

I know the market - that enables me to help you get the most for your home when you are selling, in the shortest time, and to help you negotiate the best deal for your new home!

Let me show you how my experience will work for you. Let's save you time & money. When you hire me to help you make your desired changes in your life there's nothing we can't conquer together!

As a long time resident of New Haven County raising a family I can share with you what the benefits are of living here. The hiking trails, beautiful scenery, amazing arts, ever changing coastline, with some of the most excellent schools available are just a few reasons why there's so many of us that call New Haven County home,   

TESTIMONIALS

"April-- We just want to thank you so much for being so considerate to us and for your lovely basket to welcome us into our new home. We had some snacks and had some of the bread you made, oh so delicious. It means the world to have had such a supportive agent in this process." --Love, Amanda and Marc

"April was knowledgeable, extremely patient, immediately responsive to our thousand and one questions and above all, calm and never aggressive to the point where we would have felt pressured. Her always reassuring manner guided us through our entire home purchase process. She is a credit to her profession. Kudos for a job well done." -- Anne and Jim - West Haven