Assessed Value vs Market Value: What is the Difference? -Part1

Assessed Value vs Market Value: What is the Difference? -Part1


Hi, I’m Beth with TB Properties Buys Land. Today, we’re going to discuss the difference between your assessed value and the market value of your bare land. Perhaps you’ve got bare land that you’re ready to sell, and maybe you have even received an offer from a real estate investor such as TB Properties buys Land, but you say, “Hey, my tax statement says that my property is worth $50,000. Why aren’t you going to offer me $50,000?” That is a great question and it a question we have received fairly often. People want to know why the value listed on the on paper from their county tax collector may be different from what we offer them. In some cases our offer price is higher and in some cases it is lower. The truth is that the assessed value that you’re seeing from a county differs greatly across counties and across states. In some states, in many of their counties, I see something really funny: when I look at their assessed values, I’ll see maybe a 30 acre property that might be worth $20,000, $30,000, or even $50,000 but the tax assessor’s office has its value listed as something like only $1,500! When I see that, I always wonder, where are these values coming from?

On the flip side, in many counties within Texas, where I’m located, you might see a really high property value. For example, you might see 15 acres, and it says it’s worth $115,000. But then you start to look at the property and you wonder, wait a minute, all the trees have been cut down and there’s no road to this property, and where is this high value coming from? As you can see, it’s really important to understand that assessed values may or may not be in line with market values. Some counties are really good about trying to get values of the properties based upon market value, and they adjust them accordingly and often. Do realize that assessed values are where county tax dollars come from. This can mean that if the assessed value is high, the county is going to receive more tax revenue on that property.

Assessed value versus market values… it is fascinating. In some areas, a concerted effort is made to keep the assessed values low so that tax rates are affordable for citizens. In other areas, they’re pushing assessed values up in order to increase tax revenue. That is the first thing that I want you to understand when it comes to the difference between market value and the assessed value. The assessed value that you see from your county may be somewhat in line with market value, or it may have absolutely nothing to do with that. More importantly, there are factors that definitely contribute to market value that that may have nothing to do with the assessed value. I’d like to break this up into two different videos so it doesn’t get too long. Please note that for this very first video, that assessed value that you see from your tax collector may not have anything to do with what the value is on the market. You have to get deeper into your particular property to look at its characteristics and attributes, and compare to some of the neighboring property values as well.

Those are the first things that you may want to look into, but I’ll stop that here. If it comes to vacant land that you are ready to sell, please feel free to reach out to TB Properties Buys Land. We look at more than just the assessed value. We try to look at your specific property and we make you a cash offer. We always close through a Title Company for your safety, and we try to make sure that you feel comfortable throughout the entire transaction. Please feel free to reach out to us with any questions. We look forward to working with you. Thanks again.

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