Real Estate

City Assesment and how to make your own assesment?

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Oct 15, 2006
459 posts
405 upvotes
Edmonton

City Assesment and how to make your own assesment?

The housing market in Alberta is so volatile right now with a higher number of active listings and decrease in total sales. I'm currently looking to purchase. I checked two houses in the same area last week. For the first house, the city assessment is forty thousand higher than what is requested and for the other one the city assessment is less by $100K. The second house for sure is overpriced. How do you compare the city assessment to the fair value of the property? and actually how do you give a fair price number for the property?
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Deal Guru
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Mar 23, 2008
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Edmonton
Talk to a realtor who knows the city you're looking at, and get them to run comparables for the properties in question. They should be able to help you get a handle on the prices.

Assessed property values are pretty useless with regards to purchasing, aside from giving you an idea of what your property taxes are. Speaking as someone who used to write municipal taxation software and dealt with the assessment data coming in from various sources. They're out of date, they're automated (Computer Assisted Mass Appraisals), and they're done in bulk unless someone complains that their assessment is too high. They're supposed to be based on market value, but the numbers are really only intended for taxation purposes.

C
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Oct 15, 2006
459 posts
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Edmonton
CNeufeld wrote: Talk to a realtor who knows the city you're looking at, and get them to run comparables for the properties in question. They should be able to help you get a handle on the prices.

Assessed property values are pretty useless with regards to purchasing, aside from giving you an idea of what your property taxes are. Speaking as someone who used to write municipal taxation software and dealt with the assessment data coming in from various sources. They're out of date, they're automated (Computer Assisted Mass Appraisals), and they're done in bulk unless someone complains that their assessment is too high. They're supposed to be based on market value, but the numbers are really only intended for taxation purposes.

C
Thank you. So there is no really a solid reference as each property has its own features even in the same area. Unless we're looking to an apartment in a building where many other apartments are offered for sale, we can then compare but for houses, age and basement/no basement or garage/no garage, ..etc too tough to compare and to get a solid number, the requested sell number can be just a scam i.e. $200K of overprice.
I'm more than just a picture | I'm a daughter and a sister
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Deal Guru
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Mar 23, 2008
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Edmonton
That's why you want to get a realtor involved. They will pull comparable sales and explain the differences to you can try to figure out an appropriate offer.

One of the problems with only looking at listings is that they only show the current asking price. Not what the property will end up being sold for. Plus the listings obviously only show what's for sale right now, where the comparables will show what sold over the last 6 months (or whatever your realtor needs to pull).

I think in Ontario, there's some databases to pull sold listings, including sale price. I don't believe there's something like that for Alberta; the realtor industry has managed to maintain that monopoly. But you could check around, I guess.

C
Member
Aug 14, 2011
428 posts
159 upvotes
Calgary
covergirl wrote: The housing market in Alberta is so volatile right now with a higher number of active listings and decrease in total sales. I'm currently looking to purchase. I checked two houses in the same area last week. For the first house, the city assessment is forty thousand higher than what is requested and for the other one the city assessment is less by $100K. The second house for sure is overpriced. How do you compare the city assessment to the fair value of the property? and actually how do you give a fair price number for the property?
I would actually say that the second house is a steal of a deal. get a nice sized house and pay way less taxes on it.

As a frame of reference I just sold my Alberta house and moved into a new one. The house I sold the city assessment was $30,000 less than I sold it for ( you don't ask the city to asses your house higher so you pay more taxes) and my brand new house assessed $20,000 less than I paid to build it.
Deal Guru
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Mar 23, 2008
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Edmonton
SAVINGSTAR wrote: I would actually say that the second house is a steal of a deal. get a nice sized house and pay way less taxes on it.

As a frame of reference I just sold my Alberta house and moved into a new one. The house I sold the city assessment was $30,000 less than I sold it for ( you don't ask the city to asses your house higher so you pay more taxes) and my brand new house assessed $20,000 less than I paid to build it.
It might be assessed at $100k less than MV now, but one of the factors that goes into the system is real estate transactions. As houses sell for more money in an area, the assessed values will follow. So you pay relatively less tax on it now, but that may not continue.

C
Sr. Member
Feb 1, 2010
872 posts
173 upvotes
Assessed values do not equate to market value. Market value is what the market dictates. In other words, a property will sell for whatever price the highest bidder wants to pay. Assessed values can be helpful as a guide for comparison of values between a few properties, and banks do rely on it for financing.

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