Property Assessments VS Market Value -- What's The Deal?
If you haven't already gotten your property assessment in the mail, dont worry, its coming. For many people once they get past the increase in their property taxes they will look over in the column that shows their "property value" and smile at the increase in the "value" of their property.
Don't get too excited just yet. That number doesn't mean what you think it means. In reality provincial property assessments can be too high or too low. The values you get in Januwary or February are determined in July of the previous year, and properties are rarely visited in person by provincial appraisers.
So what does that number really mean?
Look at your "assessment" as more of a weather forecast. A weather forcast that covers a larger and more diverse area than simply your neighbourhood, your specific street, or your specific property. Keep in mind that this "forecast" was made in July of the previous year, a full six months before that paper lands in your mail box.
Whereas "market value" is tied more to how much a purchaser is willing to pay for your specific propery and what a seller is willing to accept.
What is my house really worth?
That is a question best answered by professionals. Appraisers are the ones with that intricate answer. There are two different types of appraisers, Marketing Appraisers and Financing Appraisers. A Financing Appraiser will tell the bank if the house is worth what the purchaser and seller have agreed its worth. A Marketing Appraiser goes far deeper into the market value but a lender is not concerned with that. They only want one question answered. Is the actual market value over and above the purchase/sale price. Rarely does the actual market value over and above the purchase/sale price. Most of the time it is exactly the same.
In the end here are the things that you need to remember when determining what your house is really worth;
Do NOT rely on your property assessment for market value of your property.
Do NOT rely on the buyers opinion of what your property is worth.
Do NOT rely on what your friends, family and neighbours opinions of what your property is worth.
DO consider getting a marketing appraisal.
DO consider getting the opinion of a local Realtor or two, who are active in the community, and neighbourhood.