Tax assessment value and the real market value – key differences

In the past 30 days, three different prospective buyers have indicated to me that they do not think to pay a lot more than the tax value given to the property. Why is this? People apparently think that the number that is assessed for tax reasons is the same as what the house is actually worth, especially in Vancouver real estate. To fight this, many agents have begun highlighting phrasing like “priced under assessed value” in their advertising materials for the home’s sale. This has not mattered. Instead, what’s happening is that buyers’ misconceptions are seemingly validated and, thus, perpetuated. Buyers see these houses as “good deals,” but in truth they are not. The ASSESSED VALUE turns out to be figured by the public tax collector. (In BC this remains a provincial crown corporation known as BC Assessment.) The entire purpose for the assessed price is to ascertain taxes; that is all. This value is taken and combined with the tax percentages of the area.

It is variant from the FAIR MARKET WORTH. Fair market value remains the price that a abode can bring on the open market. You can see this calculation at work with any Vancouver condo. This is the cost that educated, motivated, and willing buyers will extend to procure the property from a seller who is selling of their own free will. Fair Market Value is created by comparison to similar properties which have sold in the previous three to six months. (If no comparable homes are available, the time-frame may have to be boosted.) Based on these homes’ asking prices–these are called “comps”–the Realtors direct the seller on a reasonable asking price. Following a price is agreed upon between a buyer and seller, this becomes the fair market value of a specific property. Thus, it stands to reason that preceding making an offer, a purchaser must examine comps themselves to come to an understanding of what is reasonable and fair.