Assessed vs appraised vs fair market value?

OK, I'm sure someone has asked this one before. What are the general
differences between the

assessed value
appraised value and
fair market value

For a single family, residential house?

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.

He also says that fair market value is the average price that's been
paid in the past 6 to 12 months for a house of similar specifications
and location.

So if fair market value and tax assessed value are similar, then why
is it necessary to have a property appraised to get it's appraisal
value?

How much different is appraised value versus fair market value?

Confused

In article ,
George W wrote:

OK, I'm sure someone has asked this one before. What are the general
differences between the

assessed value
appraised value and
fair market value

For a single family, residential house?

Depending on the policies of the local taxing agency, it can vary from
no relationship whatever to a very close relationship.

"Fair market value" is essentially what someone will pay for the house.

"Appraised value" is an alleged expert's opinion of what the "fair
market value" is.

These two will usually be in the same ball park.

The "assessed value" is a totaly artificial number that the local taxing
agency uses to calculate how much property tax you pay. In some areas
(such as post-prop 13 California) it is reset to the sale price when the
property is sold. In other areas it has no seeming relationship to the
current value of the house. Your taxes will be some fraction of this
number.

--
Rich Greenberg Work: Rich.Greenberg atsign worldspan.com + 1 770 563 6656
N6LRT Marietta, GA, USA Play: richgr atsign panix.com + 1 770 321 6507
Eastern time zone. I speak for myself & my dogs only. VM'er since CP-67
Canines:Val(Chinook,CGC,TT), Red & Shasta(Husky,(RIP)) Owner:Chinook-L
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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.