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_ MINNESOTA• RE�ENtTE _
<br /> www.faxes.sfa te.mn.us
<br /> My House is Worth What?
<br /> Property Tax Facf Sheet 14 . �
<br /> Why doesn't the assessor's value reff�ct the motivations and preferences of the seller and potential
<br /> sale price of my property? buyers. Ifthat weren't the case,Realtors and sellers would
<br /> never have to reduce listing prices,offers from multiple
<br /> buyers would all be identical,and professional appraisals
<br /> 1. There is a lag between the time of the assessment and would all arrive at the same value. In reality,list pnces
<br /> when the sale takes place. often misjudge the market,offers are negotiable and can
<br /> An appraisal is an estimate of property value based on vary widely,and appraised values may be disputed.
<br /> historical data at a set point in time—January 2 of each year 4. No hvo parcels of property are identical.
<br /> —and the market can change dramatically by the time the Estimating the precise value of a property that is based on
<br /> property is sold. dozens,i�rnot iiundreds,oi characieristics is very difficult.
<br /> For example,consider a property valued at$180,000 as of Even nearly identical properties(e.g. adjacent townhomes
<br /> January 2,2007.This assessment is based on home sales or condominituns)often sell for different amounts.
<br /> that occurred between October 2005 and September 2006. 5. Real estate markets are highly localized and a�lways
<br /> However,the properiy may sell for$230,000 in August
<br /> 2007.Does this mean the estimated value is incoirect?Not changing.
<br /> necessarily.It could signal an uptum in the housing market Sale prices of different types of properties can vary widely.
<br /> between September 2006 and August 2007,raising the sale Currendy,fannland and recreational properties are rising in
<br /> pnce of the home. value and sales are strong,but residential sales are stable or
<br /> slighdy declining in several areas. Some nei borhoods are
<br /> Just as buyers in rapidly accelerating markets may pay �
<br /> significanfly more than the assessor's last valuation,they decluung at a much faster rate than other areas,wluch may
<br /> may also pay less in declining markets. A properly valued be stable or slighfly increasing in value.
<br /> by the assessor at$200,000 for the 2007 assessment may 6. Fewer sales mean more challenges for assessors.
<br /> sell for$175,000 in August 2007. In man markets and for man es of ro
<br /> Y Y tYP p perty,there are
<br /> This lag time often results in a dramatic difference between few sales of comparable properties. This can make
<br /> actual sale pnces and the estimated market values for the accurate market assessments more difficult,but the assessor
<br /> current year. must still use his/her professional judgment and knowledge
<br /> 2. Properties can change over fime. to estimate market values on an annual basis. This may
<br /> mean looking at sales that take place outside the study time
<br /> While values can fluctuate on an annual basis due to sales frame or in a neighboring city or township.
<br /> of similar properties,Minnesota law requires that properties
<br /> n ,� P � , , a,-� „i �� P 7• Not all sales are representative of the market.
<br /> o_1y be:r p cted on.,e every��e}e...,,,,.r e.,.,r...w
<br /> consh-ucrion or demolition takes place.Between those Some sales,such as foreclosures,sales between relatives,or
<br /> inspections,properties may be improved without the owner sales where the seller or buyer are acting under undue
<br /> obtaining a building pemut—or they may deteriorate if duress are not considered open-market,ann's-length
<br /> neglected. These changes can be difficult for assessors, transactions and are not used in sales ratio studies,nor are
<br /> who may only see the extenor of the home,to consider in they used as comparables in estimating the market values of
<br /> their annual evaluations. similar properties.
<br /> 3. There is no"correct"price for real estate—but If you have additional questions or concerns,please contact
<br /> rather a range of prices. your county assessor.
<br /> The ultimate sale price of a particular property depends on
<br /> its unique charactenstics as well as the complex
<br /> Property Tax Division—Mail Station 3340—St.Paul,MN 55146-3340 This fact sheer is intended to help you become more familiar with Minnesota
<br /> tax laws and your nghts and respon'sibilities under the laws.Nothing in this
<br /> fact sheet supersedes,alters,or othenvise chan�es any provisions of the tax
<br /> law,administrative niles,court decisions,or revenue notices.Altemative formats
<br /> available upon request.
<br /> Revised 4/OB Minnesota Revenue 1
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