Accessed Value from Property Tax Rolls DOES NOT Determine Market Value

Real Estate Agent with Serving Sugar Land, Richmond, Rosenberg, Missouri City 620741

My next door neighbor contacted me to see if I could do a quick CMA for her son.  He is getting a divorce and his lawyer requested that he contact a realtor to get a CMA on the house. He purchased the home in 2009 for $222,000.

As I was searching for comps, I noticed there were NO similar comps that recently sold in the last 6 months in this neighborhood. This community has a very low turnover rate.  So, when faced with this dilemma, I looked at two neighborhoods located within a 3 mile radius from the subject property's neighborhood to pull comps in the last 3 months, which I was able to find. 

When I delivered my CMA to my neighbor, her first question was, "How much do you think the home will sell for?"  I told her based on the sold comps, I would say anywhere between $240K to $250K. [I explained to her that the market gives us a price range from minimum, average, to maximum SP/SF -- this figure can be adjusted based on factors that impact resale value such as property condition, upgrades etc.]

My neighbor was SHOCKED! She consulted a lady (who isn't a realtor) who told her that the home would sell for $188,000. I was DOUBLE SHOCKED!!!!  

I said that can't be.  Your son's home has 5 bedrooms, 3.5 bathrooms and is a whopping 3,192 square feet.

Homes in that neighborhood that have 3/4 bedrooms, 2 bathrooms and are between 2,000 to 2,200 square feet sold anywhere from $175K to $188K in the last 3 months and they were NOT distressed properties.  The average SP/SF was $85. (Of course, I couldn't use these comps to do a CMA because they are not reflective of her son's home. That would be comparing apples to oranges.)

So, my neighbor explained to me how her non-realtor friend came up with those numbers. As she pulled up the email, lo and behold, she determined the "estimated market value" based on the "accessed value" on the property tax rolls!!!!

I explained to my neighbor the difference between "accessed value" versus "appraised value."  

Accessed value is value placed on the property for tax purposes only.  This has nothing to do with the market value of your home.  Since homes are accessed for property taxes each year in Texas, accessed value is usually based on outdated information.  This value doesn't take into account any new improvements that you've made to your home which can impact resale value nor does it reflect current market conditions which constantly change.

Appraised value is an unbiased estimation of what a home would likely sell for in today's market based on a neighborhood's recently sold comps in the the last 6 months. (Of course, if you can find comps in the last 3 months, that is even better.) This is the method certified appraisers use to determine market value.  Remember, an appraisal is only as good as the day it was performed.

Case and Point: Contact a Realtor who can determine what your home would likely sell for in today's market!


Posted by

Rosie Crow
Keller Williams Southwest
Cell: 281-703-6901

Connect with me on Facebook

The finest compliment I can ever receive is a referral from my friends and clients! If you know of anyone who wants to buy, sell or lease a home, please let me know (or simply pass my info along)!

Comments (6)

Jordon Wheeler
The Jordon Wheeler Group - Fairburn, GA
J W Group Real Estate Sales and Service

Hi Rosie,

It's a good thing your neighbor waited to get your input.  Otherwise the neighbor might be headed towards a huge lose.

Best of GREAT success to you in 2014!

Mar 08, 2014 12:40 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     The "Tax Rolls" can be especially misleading in Florida.  Our Homestead Laws can keep the tax value of a Principal Residence artificially low for many years.    

Mar 08, 2014 08:55 AM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Rosie. Great post and very often folks come up with all kinds of ways to determine value, like Zillow and assessment. Contact a trusted Realtor to come up with the right value.

Mar 09, 2014 12:43 AM
Wayne Zuhl
Remax First Realty II - Cranford, NJ
The Last Name You'll Ever Need in Real Estate


Assessed values have very little to do with actual market value, unless the town re-assesses their properties every year.

Mar 12, 2014 12:15 AM
Rosie Crow
Serving Sugar Land, Richmond, Rosenberg, Missouri City - Sugar Land, TX
Exceeding Expectations. Delivering Results

Even if properties are accessed every year, you never use the accessed value to determine market value.  Accessed value is based on outdated information and is not an accurate depiction of current market trends. A lot of times, the assessed value can be $30,000 below the actual appraised value of a home.  It's a big mistake that inexperienced buyers make. Assessed and appraised value are not equal.



Mar 12, 2014 12:35 AM
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Rosie the assessed value is not related to market value. When my market was a seller's market, the market value was way above assessed value.  In a Buyer's market I am finding many market value below assessed value.

Mar 16, 2014 12:40 PM