The Basics of Property Valuation 

The Assessor does basically the same thing as you would expect an appraiser to do for you, appraise your parcel of real estate.  The main difference is that a “Fee Appraiser” will focus their efforts on only the property they have been hired to appraise, whereas the Assessor must annually appraise every parcel of property they have been hired to appraise, whereas the Assessor must annually appraise every parcel of property.  Both the Appraiser and the Assessor are trying to use existing market data (properties that have already sold) in order to measure the current market value of property.  Obviously the Assessor cannot visit every property every year!  Therefore, much of the valuation is done using statistics taken from the real estate market. 

Here is an over simplified example of how property values are analyzed each year.

Let’s say we are attempting to appraise a subdivision with 20 homes that are all identical.  They have 1,000 square feet, are one story in height, have 1 bathroom and 2 bedrooms.  The lot size is typical.

The Assessor would then look for any properties that have sold and are similar to those in the subdivision that took place between April 1, 2005 and March 31, 2007.  This is the sales study period that the Assessor is required to use to determine the value of property for the 2008 property values.  The Assessor finds 5 sales of similar homes.

Sale #1 sold for $80,000

Sale #2 sold for $90,000

Sale #3 sold for $85,000

Sale #4 sold for $85,000

Sale #5 sold for $90,000

The average price of the 5 sales is $86,000.  Therefore, one would conclude that a typical home in this subdivision would have a value of approximately $86,000.  One would also conclude that a larger home would sell for more and a smaller home would sell for less.

That is a very basic explanation for determining the value of a property.  Obviously it is much more complicated because every house is not the same.  The Assessor must find a way to account for these differences in an ever changing real estate market.