When you are looking at buying a home or selling your home, some people are under the impression that the assessed value on your property tax bill is a good way to figure out the value of a property. Typically, property tax assessed values are updated periodically, but might not take any market conditions into consideration, like an appraisal does.

In the past years, when homes were going through dramatic appreciation, it was better to have a lower assessed value because your property taxes weren't so high. Now, many companies are specializing in getting assessed values lowered to reflect current market values, which can make a difference on your property tax bill.

Whether you are buying or selling a home, it is important that you realize that an assessed value is not necessarily reflective of a home's market value at the present time. In fact, if your home was assessed at a new value a couple of years ago, you might want to consider having the county re-assess it because market values have dropped, especially in some areas where values have dropped as much as 50%. This can help you save money on your property tax bill, but if you have to pay for an appraisal to prove the decrease in market value, this might cost you a few hundred dollars.

When it comes to selling or buying a home, the best way to analyze market conditions in your area can be a CMA or comparative market analysis that many real estate agents use to come up with a fair price on homes they list. This can help you get a general idea of where your assessed value stands and whether you should consider having the property tax assessment value reconsidered.

If you are looking at a property to purchase, you will still want an appraisal because you don't want to go with a property assessment value, since it may not reflect current conditions. Some counties will re-assess properties every five years and some might be ten years, although many counties are doing it more frequently in an effort to increase revenues. With market declines, they are somewhat slower to re-assess a home's value, unless it is requested.

As you can see, a property tax assessment value may not reflect the same thing as an appraisal will. Lenders will require an appraisal, but if you are paying cash, you will want to have an appraised value, versus an assessment value to make sure you aren't paying more than market value. Because of changes in the real estate markets, an appraisal is considered the best tool for assessing the value of a home.

During an appraisal, they will consider similar homes that have sold and replacement cost formulas based on current prices. Since there can be fluctuations that are more pronounced in certain markets, this is the best way to find out the value of your home or one you are going to purchase. Assessments are not as conclusive as an appraisal, when it comes to determining the true market value of real estate.