Home Buyers Education: What is the Assessed Value of a Home?

Homebuyers sometimes are confused between the assessed value of a home, and the market value. Here is a brief description of what the assessed value of a home actually is.

Property owners are subject to a government imposed tax called property tax. Usually the government agency responsible for setting and collecting this tax is the county in which the home or dwelling is located. This government agency will send out their own appraiser typically once per year to “assess” the property.

A property’s assessment is usually based upon the same characteristics of a normal appraisal, except the dollar amount of the assessed value does not normally reflect the market value, or amount in which the home or dwelling could be sold for.

Normally the county’s assessed value seems to run lower than the market value. This I believe is due to the fact that homeowners are allowed to appeal the value of their property if they feel that the price reflected is too high. Keeping the assessed value of the home lower than the potential market value helps the governing agency to avoid lengthy battles with homeowners.

After the home has been appraised by the county appraiser, the assessed value is determined. This number is what property taxed are based upon. Each county has their own percentage rate of tax for which every home owner is responsible to pay. Not paying property taxes can eventually lead to foreclosure of the property by means of a tax lien.

Most homeowner’s pay their taxes along with their house payments. The mortgage lender requires that the taxes and homeowner’s insurance payments be included in a typical monthly payment. The tax and insurance payments are set aside into a reserve account, and paid separately when required.

Most counties provide public information on assessed property values, appraisals, and tax information. You can find this information for your county at the county website. Go to the assessor’s home page and perform a “property search,” and enter the required information.

Meribeth Phipps has been a real estate agent since the year 2000 in Washington State.