How are Reappraisal Values Established?
Your 2017 Reappraisal value is based on these key factors:
- Your property’s use (such as home, business, vacant land, etc.)
- Your property’s characteristics
- Square Footage (total living area)
- Age (year of construction)
- Quality of Construction
- Amenities (such as bathroom count, garage, carport, vaulted ceilings, etc.)
- Current market conditions (determined by real estate sales activity that occurred in 2015 and 2016 within your property’s immediate area).
To determine the market value of your property, our team of skilled and professionally trained appraisers:
- Visually inspect all properties to ensure our records reflect actual characteristics (These exterior inspections have been performed throughout the past four years.)
- Review and qualify all property transfers occurring within the Reappraisal cycle to ensure it reflects an arm’s length transaction, meaning a sale between two unrelated parties, both seeking to maximize their position from the transaction.
- Begin valuation analysis using a CAMA system in the fourth-year of the Reappraisal cycle by relying on the qualified sales and property characteristics collected to reflect market value as of January 1, 2017.
- Analyze current market activities, construction costs and income data according to accepted appraisal practices in accordance to guidelines established by the Tennessee Division of Property Assessments.
For most residential properties, market value is best determined using comparable sales data. With buyers and sellers in the marketplace determining market value, our appraisers use the sales approach in comparing these qualified sales to properties of similar size, age, location and description. The Assessor’s appraisal staff compares the sales prices and adjusts for differences between the properties such as total living area and year built to arrive at an estimate of market value.
The 2017 Reappraisal values will be based on qualified sales that occurred from 2015 and 2016; with the greatest weight being given to sales in 2016 because all properties are valued to reflect market conditions as of January 1, 2017.
When there are not enough qualified sales within a given neighborhood for a property to be properly valued, the cost approach is used to determine how much it would cost to replace the property minus depreciation, plus the value of the land. Our appraisers decide how much money it would take, based on current material and labor costs, to replace the home. Then the appraiser must determine the amount of depreciation based on the property’s age and condition. These cost value estimates are compared to the limited number of qualified sales that occurred in these neighborhoods to ensure that the cost values approximate market value.
The effects of foreclosures, within a given neighborhood, have been taken into account in our valuation processes. The influence of foreclosures is reflected in the sales prices of qualified sales occurring in neighborhoods that were valued using the sales approach. Foreclosures are also reflected in the cost approach in areas with limited qualified sales by applying additional factors of depreciation.
The valuation of commercial and industrial properties relies heavily on both the cost and income approach to value.