When you're discussing the value of a home, the actual dollar amount will likely be different depending on who’s involved in the conversation. Homes often have different types of values used only in certain contexts. The appraised tax value isn't determined by the same methods as the asking price of a property listed for sale.
Local governments across the country impose taxes on the owners of real property located within the jurisdiction's lines. The revenue generated from property tax collection funds different public works projects. Generally, these include public education systems, public safety and roadwork. Taxes are typically collected at the county level, however some towns and cities also impose these taxes. Each tax jurisdiction sets a tax rate and determines how to value properties. The total amount owed for taxes is calculated by multiplying the tax rate by the taxable value of each property.
Appraisals and Assessments
Depending on where your property is located, the method of determining the taxable value might be called an appraisal or an assessment. While tax assessments are more common, some locations, such as Texas, refer to the process as an appraisal. Either way, a tax appraisal or assessment is the method the tax collector uses to reach the value. Each property within the boundaries is assessed in the same manner to ensure a fair baseline. Some places choose to physically visit neighborhoods to determine taxable value, and other places use comparable home sale prices to set the value. However, the appraisal is more likely based on comparable values throughout the jurisdiction, not what a property might bring if sold on the open market.
If you want to sell your home, you'll decide what price to sell it for. The asking price is the price that an active property is listed for on the open market. It's common for homeowners to reach out to a realtor to help decide on a fair asking price. A property appraisal can also determine what the fair market value of the property is. A licensed real estate appraiser completes this process, which is not related to a tax appraisal.
Many factors determine the asking price of a property. The size, location, style of home, building materials and number of bedrooms are a few of the main driving factors. Additionally, homes with similar features in your location that have recently sold will factor into how you choose to set your asking price. However, not all properties will sell for the full asking price.