How accurate are assessed values?
Buyers and sellers will often consider the assessed value of a property in an effort to determine fair market value. There are some things to keep in mind if you do this. The B.C. Assessment office provides assessed values throughout B.C. as a means of establishing a basis for property taxes.
They do not have the time or resources to physically inspect every home in the province, but they try to be as current as possible with market values. If there is a change in the market, up or down, or if a particular property has features or renovations that they are not aware of, the assessed value may not reflect accurate market value.
Current assessed values show a figure that is supposed to be the most likely selling price, had a property sold July 1 of last year. We have become accustomed to a steadily rising market, in which case selling prices are usually higher than assessed values just because the market has gone up. In a declining market, sale prices in many cases are below the assessed values. In a stable market, assuming the assessed value was accurate in the first place, a property may actually be worth the assessed figure, but in most cases there will be a difference.
Realtors sometimes advertise a property at "below assessed value" as if it is a bargain. The rule of Caveat Emptor (buyer beware) applies here, because the property would not be priced that way unless it actually was worth less than the assessed value. Value is based on the selling prices of similar properties in the area, and that is the best way for a buyer or seller to determine the value of the home they want to buy or sell. Market values are always facts of record, whereas assessed values are an approximation of value, and should not be relied upon to determine true value.
