In a perfect world, the property appraiser’s office would be filled with crystal balls, psychics, and a system to immediately reflect today’s market values automatically in the tax records.
Not going to happen. Most property appraiser’s offices are understaffed, have to work from the information at hand, and can’t predict future values, only history. So at best, tax records reflect the past, not the present.
In normal markets, you can assume that whatever trends are prevalent in the market are just slow to reflect in the tax values. In the crazy market we are in today, you can only assume that the tax values may in no way be connected to today’s actual market value.
It’s possible to find an area in which some homes’ tax values are higher and some lower than actual market value. When a prospective buyer tries to use this information in order to determine a price to offer on a particular home it becomes confusing and no help at all.
Only by looking at recent sales prices as well as properties currently for sale (to see trends) can a buyer come up with an approximation of the value today.
Most buyers will be having an appraisal done on the home as a condition of their mortgage and if the home doesn’t appraise for at least as much as the price on the contract, the buyer has the option of getting out of the contract (see specific language in the contract to be sure of this). This acts as protection for the buyer so that they don’t over pay for a home.
The tax records should only be used to see what the actual TAXES are on the property, not as a tool to determine value.
Tags: buyers, price, property tax, real estate
