On 14 Sep 2003 06:39:12 -0700, someone wrote:

Assessed vs appraised vs fair market value?

My real estate friend says there's no such thing as "fair market
value" since it's too subjective. He says fair market value is
usually tax assessed value because tax assessed value is established
by a municipality like a town or a city.

If you friend actually said that, he is an idiot and does not deserve
to be anywhere near the real estate business. We can only hope he was
misquoted.

FMV is what a willing buyer would pay a willing seller, neither under
compulsion, etc. etc. Basically, what the mythical "reasonable
persons" would buy and sell for.

Appraised Value is most usually the appraiser's expert opinion of FMV,
**but** an appraiser can also be called on to give some other type of
value, like foreclosure/quick sale, partial interests, etc.

Of course expert opinions can differ, and a house could sell for some
increment above or below the expert consensus due to individual tastes
and bargaining positions, but that doesn't mean that the concept
doesn't exist. In fact, it is often REQUIRED by law.

Assessed value is **supposed** to be based upon a uniform fraction of
FMV for that class of property. However, the acuracy and care used in
various taxing jurisdictions varies widely. What Cal has with Prop 13
is different than just ignorance or sloppiness in that even if the
Assessor 'knows' what the FMV is, he can't tax you on it if that
figure exceeds limits.


-v.