Assessments: What They Mean To A Buyer - part 2 of 4
Having worked with many buyers over the past 20+ years, I am always amazed at how misunderstood property assessments are, especially when it comes to a market value. As we look at homes, buyers will always compare the assessment to the price. When it came time to write an offer, the assessment numbers would come up again.
In a hot sellers market, most homes could sell over their assessments. In a long term declining market, the properties would most likely sell under their assessments.
Why is there such a swing? It has to do with timing, and how fast the market is moving and how slowly assessments are revised. A good buyers agent will be able to point out and prove to you what the current trend is. If the comparable sales over the last 3-6 months have been selling at X% over/below the current assessments, it gives the buyer a good formula to work with. That is based on the assumption that the property is assessed in the same manner as the comparables (comps). You can’t look at just one or two comps to get an accurate number, you will need to look at a handful of 5-10.
Assessments vary from one neighborhood to another within the city of Milwaukee, and the same in the suburbs of Greater Milwaukee. Some municipalities reassess yearly, others only every few years. When a reassessment is being done, it could be completed by using sale numbers for neighborhoods and changing assessments on a percentage basis of those sales. On occasion, assessors will reassess by actually viewing the interiors of homes by way of appointments with the owners. If you don’t agree to let the assessor in the door, you are at the mercy of their imagination. If you let them in the door, they will have an accurate picture of the condition of the home and any improvements you have made, whether or not permits were pulled. It is your choice to “co-operate” or not.
If you don’t agree with the new assessment numbers, you can follow the procedure to protest it. That information will be included with the new numbers. Be sure to take note that it is usually for a limited period that you can protest the numbers!
Here is a dictionary of terms related to this subject. For more questions on assessments, feel free to call me!
Posted by:
Pat Tasker
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