Agenda Packets - 1999/09/20 - Laserfiche WebLink

Home Browse Search

ESTABLISHING MARKET VALUES The purpose of the assessment process is to make an accurate estimate of the market value of each parcel of taxable property every year. Doing so requires current information about the properties being assessed and the local real estate market. The Ramsey County Assessor's Office maintains a record of every property in the County, including its size, location, physical characteristics and condition. This record is updated whenever new information becomes available - as the result of the four-year review, improvements being made to the property, or when a physical review is requested by the property owner. This information is computerized, allowing statistical comparisons of properties by type and location. It is important to know that assessors use a mass appraisal process for valuing residential property, which is different from the individual appraisal system used by mortgage companies and others. The mass appraisal system used in Ramsey County involves the comparison of thousands of properties with actual residential market sales from the same area and throughout the county. New homes, additions, and remodelings are valued based on their individual characteristics, their contributory value, and construction costs. Because the property assessment establishes estimated market values, having the local assessment system operate effectively requires as much information about the local real estate market as possible. The Assessor's office keeps a record of all property sales using the Certificate of Real Estate (or CRV) filed with the County for each property sale. The office also examines multiple sales; properties which have sold more than once over a period of a few years. After taking into account any physical changes that may have occurred, the Assessor is able to estimate what is happening to the real estate market over that period of time. All sales information collected by the Assessor's office is closely analyzed. Evidence suggesting a forced sale, foreclosure, sale to a relative, or anything but an arms-length transaction results in the sales information being discarded. This is important because the real estate sales information is the data base for the statistical comparisons necessary to make the property assessment. The accuracy of the Assessor's office estimated market values is measured by the sales ratio, which is the Assessor's estimated market value divided by the actual selling price. For example, a house having its estimated market value assessed at $90,000 and an actual selling price of$100,000 has a sales ratio of 90 percent. For municipalities in Ramsey County, the accepted range for the median sales ratio measurement is 90 percent to 105 percent. In other words, the median (or midpoint) of the sales ratios for all properties sold should fall within 90 percent to 105 percent. 11