Im looking to buy a home on an online auction of the local county.
The home is Worth 70k +
its saying its assessed at 4,100 yes forty one hundred dollars...

Anyone can think of why?

Their are a number of other homes on the auction block with these low assessed values.

I did a drive by the home is still their its not the land! it was bought for 211k in 07' so they knew the home was their...

Any thoughts?

assessed value is not appraisal or market value. assessed value is what many areas use to calculate taxes.

in my area a house that is appraised at 500,000 or more can have an assessed value of 40,000.

In some cases they will lower assessments prior to condmening the land. It makes it easier and cheapr to impose eminent domain.

2 ways this would play out possibly...a home owner wants to remodele and obtains a builing permit for a new 'whatever' if the repair or upgrade is more than 50% of the assessed value then the city has the right to condemn the property as blighted. Also when preparing compensation offers the city will often determine a 'fair market value' based heavilyon the tax assessed values.

It is time to do more research.

Now THAT is quite a swing . . . . makes me think that your Assessors might be getting a little payola (sp) ?

I have some Taxpayers up here who have no idea that there might be a way to have their Assessments come in at only 8% of True Value (assuming that Appraised Value bears some relationship to what a Buyer might pay for the Asset).

^ I admit it is crazy. The actual tax seems normal compared to other properties..

In another township, a teensy house in the 120,000 range is assessed at 87,000 and also has typical/average taxes.

I really pay no attention to assessed values.

An $87,000 Assessment on a $120,000 property is still 72.5%; and well within the realm of reason.

In contrast, that $40,000 Assessment on a $500,000 property, or only 8%, appears to be off the radar screen.

Even if you don't pay attention to Assessed Values . . . . the other Taxpayers ought to be up in arms ! They're the ones making up the difference.

To be fair, the $120,000 home ought be Assessed at only $9600.

It's consistent with other properties in the township though.

My home that is in the same township as the 500,000 is assessed at about the same percentage.

The other home ($120,000) is in a different township and county and is consistent w/ other homes in that township/county...

home in township/county A is assessed at 87,000 and pays a total yearly tax of around $1500.

home in township/county B is assessed at 13,000 and pays a total yearly tax of around $1100.

(to be fair though the homes aren't really comps to one another)

Confusing? Yeah.

In PA, assessments are done on a county basis. And they're not necessarily updated every year, in some cases it's once every ten years or so.

But it's the tax rates that really matter. In our county, our home is assessed at 8 or 9% of the market value. In an dajacent county, the assessement might be 70% of market value. But the taxes would only be 15% or so higher in the adjacent county, and only because of the millage rate.

So what do you do when you have a sale, in May of 2010 . . . . keep the old assessment or adjust the sale price by some CLA (Common Level of Assessment) to keep values equitable ?

I thought there was a US Supreme Court Case in the 1970s that forced that issue because Newbies (recent purchasers) were typically paying much more in taxes because their assessments were more reflective of current values than those (perhaps identical) homes that HAD NOT changed hands in decades.

In the county I live in assessed value is 19% of the market value for residential property..32% for commercial and 12% for agriculture.

Sale price in my area is not recorded/public knowledge and market value is placed by assessors office "drive by's".
The only way to find out sale price is to be a member of our MLS and have IDX access.

*I'm going to ask the abstract agent I am friends with to explain it to me again.* It made perfect sense when she explained it to me previously and it's time for a refresher!

I will post her response here. Our system may not make sense to outsiders who come from areas where the taxes are handled differently but it works for us. lol.

In the hundreds and hundreds of properties I've looked at the past 3.5 years, I've not noticed anyone's taxes being noticeably out of whack compared to other similar properties in the same school district/township/county.

HOWEVER, two neighboring properties that are on opposite lines of a school district boundary may have GROSSLY different taxes even if their properties are nearly identical. About 75% of the total tax is school tax.

If a property is a WATERFRONT home then the taxes will be quite different than a non-waterfront home.

Property is not automatically re-assessed upon a sale unless it's a new construction that is still being assessed as vacant land. Not sure what they do about additions/new buildings on properties - I will find out.

The assessed value is strictly for taxes only - they do make adjustments but when the taxes are adjusted I believe it's the millage.

I will pick my friend's brain again and report her response here. I always send questions to her - she's a walking encyclopedia of legal info.

In my area, some communities are on "full value" assessment and some are on a percentage value. This is certainly confusing to an outsider looking in. Additionally, most areas have not been reassessed in the past 10 years or so, so that even "full value" assessment may be 10 years out of whack with current values. It is common in certain neighborhoods for homes to be listed at 50% (or more) higher than assessed value. So assessed value isn't really a good indicator of what a property may be worth.

assessed value is simply what you pay taxes on and is not market value or current appraised value. we get assessed every 3 years so the nubmer can be up to 3 years off! example..for years people have had higher assessed values than market values because teh numbers came in from previous(higher valued)times. now people are getting lower values on their assessments because the market has changed. it changes, but will always be behind current makret.

Vermont might be a bit different on this score.

We have a state requirement that Assessments be uniform and equitable in each Township (not County).

The way this is done is that each community has a dynamic Assessment Ration that is altered with the recording of every Real Estate Transaction . . . . so it's continually changing.

Ideally, the Assessment Ratio would be at 100%, meaning that all Transactions were conveyed at a price reflected in their Assessments. Of course, that DOES NOT happen. But the A/R is a useful tool for the State to monitor how well each Community is doing at keeping Assessments up-to-date.

So, the Assessment Ratio (or Common Level of Assessment) will vary from about 70% up to about 130% of Sales Prices.

In its effort to keep Assessments current, the State will warn communities that they have allowed their assessments to get "out of whack" when they FALL below 80% OR RISE above 120%. They will threaten to withhold State Aid to Education OR the Highway Funds when it falls below 70% or rises above 130%.

Furthermore, at this point, the State will go out and order every property in the Community to be re-assessed by an contracted outside Appraisal Firm, the costs for which will be paid for by the Township. This is a "big stick" because the Town would much prefer to go out for competitive bids on this endeavor, which can cost $100,000s . . . . and all just to satisfy a State Mandate.

So, after all is said and done, our Assessments are kept fairly up-to-date EXCEPT when the market plunges dramatically like in the 2006 to 2008 time period.

I still wouldn't rely on an Assessed Value to establish a Market Price; but within a given community, they are fairly equitable (mostly), and are good for comparison purposes.

Our last assessment was sometime in the late 1990s. The assessed value is then multiplied by what is called a Common Level Ratio (which I understand can change from year to year.) to get the value upon which to base the tax amount.

The only time that property is reassessed is if a physical change occurs to the property that requires a permit - an addition, a deck, a garage, or a new home on a vacant lot.

Rigged up the "Vermont Way", we all get Re-Assessed, whether we need it or not, any time the Town's CLA deviates from the norm, triggering the Re-Appraisal Mandate from the State. That just guarantees that everyone gets attended to, not just those who just bought or just built, or pulled some kind of Building Permit, all official-like.

Some of these little Towns are now suffering from Re-Appraisal Whip-Lash, having been under-assessed 5 years ago as the bubble grew, and being forced to Re-Appraise the entire Town with an outside Firm to get the Assessments UP, and then starting 2 years ago when the bubble burst, finding themselves over-assessed, and having to hire another Firm to do it all over again to get the Assessments back DOWN.

So, for many little Vermont Towns, Property Taxes go for Schools, Highways, and Re-Appraisals . . . . in that order. If you leave Cookies and Hot Cocoa for the Outside Appraisers, they'll look kindly upon you too. They like that !

No offense, but Vermont (the state) sounds kinda like a PITA. LOL

It's run by those Scalawags from New York . . . . like Bernie Sanders.

Someone recently rumored that Elliot Spitzer was coming over too.

Kinda hate to burst a bubble but not one really got it right, I called the county appraiser and they explained the home had a fire and it was worth 80k but had 74k in damages and a flood. It puzzled everyone.... figures!