It is that time of year again when the property appraiser sends us our TRIM notices with our proposed property taxes. Pay close attention to your Just Value as determined by the Broward County Property Appraiser. By the way, if you disagree with the Just Value in your TRIM notice you can challenge the proposed taxes. We have successfully helped our clients in this process by providing comparable sales and supporting data from our MLS system.
Just Value vs. Assessed Value
To make things as confusing as possible, the property appraiser uses the term “Just Value” synonymously with “Market Value”. Just Value is supposedly what a buyer would have reasonably paid for your property as of January 1st of the current tax year. They start by determining the value of your land based on a price per square foot of comparable lots. Then they add the value of your building which is based on an adjusted square foot valuation model. By the way, adjusted square feet is not the same as actual living area and is calculated from air-conditioned and non-air-conditioned space. Also, Just Value does not consider the condition of the building or how many beds and baths you have.
Your Assessed / SOH (Save Our Homes) Value is used to compute your property tax due. If you homestead your property then the Assessed Value should be less than your Just Value. If you have homesteaded your property for a long period of time then the difference could be significant since the Save Our Homes Amendment caps Assessed Value increases at 3% per year.
Automated Valuation Models (AVM)
An automated valuation model is basically a computer program that calculates the value of your home based on proprietary algorithms including location, square footage, property features, number of beds and baths, etc. The most famous AVM is Zillow’s Zestimate®. For obvious reasons these AVMs are certainly not perfect. A funny example of how inaccurate an AVM can be involves Zillow CEO Spencer Rascoff. According to Inman News Rascoff recently sold his Seattle home for $1.05 million, 40% less than the Zestimate® of $1.75 million.
True Market Value
The only way to truly determine the ultimate sales price for your exact property is to list it for sale on the open market and see what reasonable buyers are willing to pay. This assumes of course that both buyer and seller are motivated and informed, and that the property is reasonably priced and exposed on the open marketplace for a period of time consistent with comparable sales. The best way to determine list price and market value for your property is to ask your REALTOR® to provide you with a comparative market analysis (CMA) that includes recent sales and active listings. You can also consider Just Value and an AVM before listing your property for sale, but a CMA from a local real estate professional should be your most accurate resource.