To find the value of any piece of property, the Assessor must first gather all pertinent information in the community, such as real estate sales, construction costs, rental incomes, operating expenses, interest rates and any other factors available.
Utilizing the information collected, the Assessor can then go about finding a property's value in three different ways.
SALES COMPARISON APPROACH
The first way is to find properties like yours, which have sold recently. Their selling prices must be analyzed very carefully to get at the true picture. One property may have sold for more because the buyer was in a hurry to occupy the property and would pay any price. Another may have sold for less because the owner needed cash right away and took the first offer.
Comparing the selling prices of properties similar to yours, the Assessor considers such over or underpricing to arrive at a fair evaluation of your property's value.
The second way the Assessor values property is based on how much money it would take, at current material and labor costs, to REPLACE your property with one just like it. If your property is not new, the Assessor must also determine how much it has depreciated due to normal wear and tear of other negative factors. In addition, the Assessor must estimate how much a lot like yours would be worth if vacant.
The third approach, measures a property's value by its ability to generate net income. In most cases, the approach is not used for houses, unless it is used as a rental property.