Hunting Happiness

MyMoneyBlog has a post about real estate valuations by the auditor and their affect on your real estate taxes.  The gist of the post is that with home prices sagging in most areas, now is a good time to determine if your home is over-appraised by the auditor and to challenge it.   Doing so could net you a reduction in real estate taxes owed.

But is there a reason you may NOT want to do this?  There may be — if you are planning to sell your home in the near future.   Most counties now publish real estate records online, and increasingly-savvy home buyers are using this as a way to judge your asking price.  In addition, many real estate valuation tools like Zillow use this data, either as the primary or one of many methods to estimate the value of your home.  Further complicating the situation is the varying methods county auditors use to determine the assessed value.  In almost all cases, it is substantially less than fair market value.  For example, in our area a general rule of thumb is that it’s about 10% low.  This is because the auditor bases the value on the 100% of the improvement (ie the structure itself) but only 25% of the land value.

So if you are planning to sell your home in the near future it may make more sense to leave your assessment high.  Besides the potentially arduous process to contest it, it could cause your asking price to be perceived as high, even if it is fair.  Outside of this circumstance, it definitely is worthwhile to check into the specifics for your county and consider challenging your appraised value.