The actual value of the house is NOT the property assessed value
Many buyers are operating under the misconception that a home’s buying price needs to be just above its tax assessed value. In other words, they understand that tax assessed is the same thing as “what a home is valued.” This is definitely not the case, but just this month I’ve found no less than three potential buyers selling vancouver real estate who refused to offer anything higher than the tax assessment value on homes they truly loved.
To fight this (at least in the Vancouver bc real estate market), many Realtors have begun featuring phrasing like “priced under assessed value” in their marketing materials for the home’s sale. This has not mattered. Instead, what’s happening is that buyers’ misunderstandings are seemingly validated and, thus, perpetuated. Remax Vancouver agents say that “Shoppers see these homes as ‘good deals,’ but in truth they are not.” The ASSESSED VALUE turns out to be figured by the public tax assessor. (At BC this is a provincial crown corporation known as BC Assessment.) The entire purpose for the assessed price is to assess taxes; that is all. This value is recorded and combined with the tax levels of the locale. This is variant from the FAIR MARKET VALUE. Fair market value is the price that a abode can get on the open market. This is the value that educated, motivated, and willing shoppers will offer to procure the property from a seller who is selling of their own free will. Fair Market Value is determined by comparison to like properties which have sold in the previous three to six months. (If no comparable homes are available, the time-line may have to be boosted.) Based on these homes’ going prices–these are called “comps”–the representatives counsel the seller on a reasonable asking price. Once a price is arrived at between a buyer and seller, this becomes the fair market value of a particular property. Thus, it stands to reason that in advance of making an offer, a buyer could examine comps themselves to come to an understanding of what is reasonable and fair.
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