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When buying or selling a home, the realtor might mention the “assessed value” of the property. While often used interchangeably with a real estate appraisal, an assessment is not the same thing. One important distinction is that an appraisal estimates the price that a home could sell for. An assessment helps to calculate the property tax amount. Another difference is that an appraisal is performed by a contractor hired by a mortgage lender, while an assessment is done by a government employee from the county or city assessor’s office. In our region, that is either the St. Louis county assessor or the City of St. Louis assessor.

What is the Difference Between an Appraiser and an Assessor?

An appraiser’s job is to determine a home’s worth for lenders. When a buyer makes an offer on a home, they need the home to appraise for at least the same value as their offer, or the bank won’t loan them the money. Likewise, a seller wants their home to appraise for the asking price or more, so buyers will know it is worth the investment. 

An assessor, on the other hand, usually estimates fair property values for multiple homes in a neighborhood. The city or county then uses those values to determine how much residents should pay in property taxes. The values for all properties in a jurisdiction are kept in a master list, so government officials can ensure the tax burden is being distributed fairly between citizens.

In short, an appraiser works for the bank, while an assessor works for the city or county.

What Does the Assessed Value Mean when Buying or Selling a Home?

There are two amounts heard when dealing with real estate; one is the market value, and the other is the assessed value. 

Market value is the price that a buyer would be willing to pay and that a seller would be willing to accept. Market value is based on factors such as:

• Location. Low crime rates, highly rated schools, and convenient access to shopping can make a home worth more.
• Supply and demand. If buyers want to live in a certain suburb but there aren’t many homes available, chances are they will pay a higher price when one goes up for sale. On the other hand, a home located where For Sale signs are popping up all over, buyers might not be willing to pay a high price to live there. 
• Comparable sales. If a house is the same size and in the same neighborhood as multiple other homes that have recently sold, a seller can expect buyers to pay a similar price.
• Curb appeal. A well-landscaped home with new paint and a new roof is likely to be worth more than a run-down house next door. 
• Internal qualities and updates. The size of bedrooms, extra rooms like basements, the age of appliances, and improvements in energy efficiency can all affect how much buyers are willing to pay for a property. 

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Because Realtors are constantly watching trends and changes in market values, they can help sellers decide on the maximum price to ask for their homes. They can also help buyers know when a home is or isn’t worth the asking price. 

But the assessed value is different. Because an assessor is only concerned with the value for tax rate purposes, he or she does not need to consider the highest price that a buyer would be willing to pay. Instead, the market value, multiplied by an assessment rate, results in the “assessed value” or taxable value. The assessed value is almost always lower than the market value. 

Some homeowners are unhappy when they see that an assessed value is lower than they think their home is worth. But a lower assessed value can actually be a good selling point because it keeps taxes on the lower side.

What Happens During a Property Assessment?

Depending on the location of the property in our region, the assessment is performed by either the St. Louis County assessor or the City of St. Louis assessor. Working with a team of professional appraisers, analysts, and managers, the assessor gathers the following information to come up with an estimated fair property value:

• Prices of comparable area homes that have recently sold. 
• Recent improvements to the home, such as bathroom remodels or room additions will boost the value.
• The estimated cost to rebuild the house, using current costs of materials and labor, profit, overhead, and permit fees.

In some cases, the assessor conducts on-site visits but usually does not need to enter the building to perform the estimate. He or she uses computer-generated tools along with current real estate trends and statistics to evaluate how much the property is worth. 

How Often are St. Louis Real Estate Assessments Performed?

Real estate property is assessed as of January 1st of each odd-numbered year, so the value stays the same for two years. Reassessments are necessary every other year to reflect home improvements as well as changes in the real estate and building markets. Changes since the previous assessment, such as the addition of a garage, or if there is a hot housing market, are bound to increase the assessed value, and in turn, the real estate taxes. Taxes can also increase if the tax rate for the city or county has gone up. 

However, if the market begins to spiral downward or a property has deteriorated since the last assessment, chances are the assessment value will decrease.

Can I Contact the St. Louis County Assessor’s Office?

Residents who disagree with their property tax bill have a right to appeal in hopes that the assessor will lower the assessed value of their home. Appealing involves checking that the size, age, number of rooms, purchase price, and any improvements are accurate. If any of those are found to be wrong and an appeal is won, a reassessment will be performed. 

Other issues the assessor’s office can help with are parcel boundaries, ownership data, and eligibility for tax exemptions. 

Homeowners in St. Louis County who have questions about their property assessments can contact the St. Louis County Assessor. City residents can contact The City of St. Louis Assessor’s Office.

Real estate terminology can be confusing and even intimidating to buyers and sellers. The agents at Berkshire Hathaway HomeServices Select Properties are here to help. They can explain everything and how it relates to the sale or purchase of your home.