Are you wanting to get into the real estate game but don't know any of the lingo? Parse through this plethora of lessons where you will learn the meaning and specific application of dozens of real estate terms taught by the incredibly successful Michael Burer.
Featured Coaching Excerpt - Notes & Transcript, Part 1
Assessed Value: The value of real property established by the tax assessor for the purpose of levying real estate taxes and supporting our incredible government who never spends more than they have.
Lesson Nugget: Assessed value refers to the value that a property will be taxed on. The higher the assessed value equals higher taxes on that property.
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-All right, we're on Thrive15.com, an here with Michael. There is no real estate topic too obscure Burer. In sunny San Diego, look around people. This is a beautiful place. No, no. We've chosen not to be out there but right here talking about real estate for you to answer the questions that you need to know, and we're going to be talking about assessed value I shall read the definition, and I want to get your ample example that my mind can handle about what this means. Here we go.
-Assessed value-- the value of real property established by the tax assessor for the purpose of levying real estate taxes and supporting our incredible government who never spends more than they have.
-I like it.
-I don't know who wrote that part, but talking about assessed value. What does that mean?
-Assessed value refers to, depending on the tax jurisdiction, how they determine the value of the property that they're going to apply the tax rate to. So in some tax jurisdictions it could be the market value, it could be a replacement cost value, but however in that jurisdiction they determine the value of the building that they're going to tax.
-Now, you guys have properties in Hawaii and Phoenix, and let's just say I'm in Hawaii. Do they ever in Hawaii try to assess the value of your property at more than what you think is reasonable to make you pay more taxes? And then you come back and you say, no, no, no. I want to pay less taxes so my building's worth less, but then the next year when you try to sell it you realize you've got it assessed too low. You're trying to save taxes so you try to push it to be assessed too low and now you have to sell it at a lower price. I mean, does this sort of stuff happen all the time?
-Well, it doesn't affect how you're going to sell it, but certainly you would have often, as an owner of real estate, you would appeal the assessed value to try to bring the value down. And that can be independent maybe from your marketing efforts to sell it later for a higher price.
-As a chief financial officer of this real estate group here, how often do you challenge the assessed value of a property? I mean, does this happen on an annual basis?
-All depends on the market and how-- it all depends on the specific tax jurisdiction and how they handle property taxes. But for example, in Texas you would be appealing the properties every year--
- --based on--
- --how they do it. It's because their method over there they assess it at market each year. In California it's by statute. More of a-- it's set through Prop 13. The increases are limited.
-And when you say Prop 13, what does that mean?
-Prop 13 is a California law that was passed in the '70s that limited property tax increases, so it's taken a lot of the need out for tax appeals in California unless you're in a declining market.
-OK. Now Michael, I just want to share this, and I really want to tell you how much I appreciate you, but I don't want to do it in a way where it seems like it's contrived or like I've sat down ahead of time and written something down or I'm like-- I just what you to know that I could not appreciate you any more if I worked really hard.