Monday, August 17, 2015

The Relationship Between Market Value, Assessed Value, Taxable Value When Buying or Selling a Florida Home

Whether buying or selling a home there are a couple of key points to remember about a residential real estate transaction:
  1. A prospective buyer does not care what you paid for your home.
  2. The assessed value at the property appraiser's office has nothing to do with the price a prospective buyer should offer.
The current Brevard County, Florida residential market (like most other areas of Florida) is a seller's market.    There are simply more buyers chasing fewer available properties resulting in rising prices and multiple offer situations.
A buyer may want to use the assessed value from a tax appraiser's office to determine an offer price.  But the assessed value has nothing to do with market value.   There is no "secret multiplier" that can be applied to the assessed value to determine the market value.

Likewise some sellers like to refer to a big real estate web site that offers Z-estimates to get their property's selling price or worth.   Again, they have little to do with  market value primarily because the value lacks current data.  Hint:  call a local real estate agent. 

Here is a question from the Brevard County Property Appraiser website about these values.
Q. What is the difference between market, assessed, and taxable values?
The market value is the most probable selling price, based on the actual sales of similar properties, less the typical costs of sale.
The assessed value may be less than the market value if the property is a residential property having homestead exemption and is therefore protected by the "Save Our Homes" Constitutional assessment limitations.
The taxable value is the assessed value less any applicable exemptions.
My suggestion for any buyer who really wants a specific house...Make your initial offer a reasonable offer with only the necessary contingencies.

Contact me about the Florida First Time Home Buyer Program.   I can refer you to knowledgeable lenders!