Real Estate Valuation Has 3 Different Evaluation Methods

1. True Market Value – which evaluates a proper against similar sold properties based on location, size and overall conditions.
2. Cost Approach Method – Estimates the value of a property based on how much it would cost to replace it.
3. Income Method – used in commercial rea estate that determines a property value base on home much income relative to the expenses of a property.

When it comes to real estate valuation, the local property tax assessor’s office will value a property by its appraised value or it’s assessed value. The assessed value figure will come for a recent town or county blanket appraisal for an area.

A licensed appraiser (will charge $350 to $500 or more for an appraisal) can conduct a true market valuation that is exact for a specific date in time. Over the years this value can fluctuate considerably.

Since the expense of such an appraisal is very expensive, it is not done often. I’ve witnessed areas where the last blanket appraisal was over 40 years.

A sales ratio (called by other names in various localities such as director’s ratio, equalization rate etc.) will be used to bring the appraised value to current market valuation by the assessor.

Property Tax Rate
The terminology for tax rate is often called a mill rate. Each municipality calculates the tax differently. Some use a millage or mill levy. One mill represents one-tenth of one cent. For a $1,000 assessed property, that value would be $1.

For example, a town or county needs $1 million dollars in tax revenue to meet its expenses. If the total assessed property value for that area is $10 million dollars, the property tax rate in that county would be $1 million divided by $100 million which is 1 percent.

There is a wide range of tax rates in the United States, some areas are 6 times more expensive tax rates than other states. New Jersey is one of the highest taxed states yet on the voting ballot there is no mention of a lower the property tax petition.

Real Estate Property Tax Appeal Help

We are an organization that wants to help you see if you have a property tax appeal worth pursuing. We offer for free:

1. Property Tax Appeal Mind Map – guides you through winning your property tax appeal
2. Property Tax adjustment Category Worksheet –  a spreadsheet that reveals categories where you can make adjustment for comparative properties
3. Free access To All Comparable Sold Homes In Your Area – get actual sold data that helps you verified the true market value of your subjects home

 More information for real estate valuation, https://www.investopedia.com/articles/realestate/12/real-estate-valuation.asp

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