As you prepare your 2016 taxes, it’s important to understand how the tax-assessed value, or Estimated Market Value, of your home was determined by the Minnesota Department of Revenue. Here are insights you can use as you determine the accuracy of this estimate.
Today’s market vs. yesterday’s market
First, a quick recap: you will pay your 2016 taxes in the spring of 2017. As a homeowner, your 2016 Estimated Market Value will be used to calculate your share of the local property tax levy. Your Estimated Market Value is determined by your city or county assessor using historical sales data and mass appraisal techniques.
This year’s assessment was determined by using market statistics gathered between October 2014 and September 2015. But most areas in Minnesota and western Wisconsin have seen significant price gains since that time span, meaning estimated values could be lower than the current market values.
For example, the current median home price in the hot suburb of Richfield is $225,000. Meanwhile, the median home prices in this area ranged from $188,000 to $205,000 during the months the 2016 data was collected. (Source: Northstar MLS) By relying on their 2016 Estimated Market Value to price their home, the average Richfield homeowner may be shortchanging themselves by up to $37,000.
Your home vs. your neighbor’s home
When your assessor creates your Estimated Market Value, it is based upon a mass appraisal of similar, recently sold homes in the area. That means that even if your home has a brand-new luxury kitchen remodel, its estimate may be based in part off the sale of a nearby home with a 1960s avocado green stove and peeling laminate countertops.
Conversely, if your home is the one that desperately needs an update, your Estimated Market Value may be higher than the price you should expect if you put your home on the market.
Get a second opinion
If your Estimated Market Value is making you hesitant to sell, consider getting a second opinion. Edina Realty offers a free comparative market analysis, using current data and market conditions. And unlike automated online estimates, our market experts will analyze your home’s exact location and condition to ensure they’re giving an honest, customized analysis of your home’s potential resale value.
Reach out today for a free home value estimate. Who knows? Maybe your home is worth more than you think.
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