Estimated Market Value
The estimated market value should be the most probable sale price of a property in terms of money in a competitive and open market. The estimate is based on key assumptions: that a buyer and seller act prudently and knowledgeably, allow sufficient time for the sale, and are not affected by undue pressures. The Assessor’s Office works throughout the year to establish market values of each property as of January 2 of each year for taxes payable the following year.
Notice of valuation and classification
Each year, property owners are mailed a notice of valuation and classification. This notice provides information on the market value and classification for the current assessment year. Properties can be classified in a variety of ways but the most common are residential and commercial. It also provides information on appeal options, explanations of various definitions of values and exclusions, and the Assessor's revaluation requirement.
Determining market value
The Assessor’s Office uses a mass property appraisal process for estimating market values. This system involves analysis of recent property sales and physical features of the sale property. The assessor also analyzes construction costs, costs of operating and maintaining a property, what rent it may earn, and many other considerations affecting market value.
The assessor estimates property value in three different ways:
- Sales comparison: This approach compares property and its physical characteristics to others that have sold recently. Adjustments are made for differences to arrive at an estimate of what your property would sell for.
- Cost: This approach values property based on how much money it would take, at current material and labor costs, to replace property with a similar one. If the property is not new, the assessor depreciates the cost, based on age.
- Income: This approach estimates the current value based on a projected future income stream, such as how much income the property would produce if it were rented as an apartment, store or factory.
The assessor may rely more heavily on the value of one approach, depending on the type and nature of your property.
Why values change
Property values are based on market values that fluctuate with a changing market. State laws require changes in the marketplace to be reflected in the assessor’s estimated value.
Physical changes made to your property can also affect your market value. For example, if you were to add a garage to your home, the market value may increase. If your property is in poor condition, the market value may decrease.
Estimated market value does not change at the same rate on all properties
Changes vary by neighborhoods and individual properties. Sales in one area may indicate a large increase in value in a given year, while another neighborhood may have little or no change. Properties within the same neighborhood may show different value changes based on physical characteristics. There are numerous factors to be considered in each property, which will cause value changes to differ. Some of the factors that can affect value are location, condition, size, quality, number of baths, basement finish, garages and many others. Property information may have been corrected, resulting in an increase or decrease in value different from neighboring properties.
Home improvements and value
Generally speaking, improvements that increase the market value of a property will increase the assessor’s estimated market value. Typical improvements that increase the value of your property include added rooms or garages, kitchen or bath renovations, central air conditioning, fireplaces and extensive remodeling.
Good maintenance will help retain the market value of your property, but generally will not lead to substantial value increases. Improvements such as water heater replacement, roof or siding repair, painting and plumbing replacement will probably not result in any change in your property value.
Property tax relief programs
Physical inspection of property
The assessor maintains records on the physical characteristics of each property in the county. The Assessor’s Office is required by state law to physically review your property at least once every five years and record any changes in property characteristics since their last visit. This review is part of an ongoing revaluation program to ensure the accuracy of data and to assist in estimating a fair and equitable value of property for property tax purposes. This process is known as the quintile review. Reference Minnesota Statutes, section 273.01.
Ramsey County appraisal staff carry county identification and will request permission to view the interior and exterior of your property. If you are not home, we will complete an exterior inspection and a notice may be left on your front door notifying you of our visit with any further instructions such as a need for an interior review or verification of information.
Appraisal staff view the interior and exterior of your property to collect property characteristics used in estimating market value. The property characteristics such as year built, style, square footage, quality of construction, and condition are entered into a computerized mass appraisal system.
What happens if I do not let the appraiser in my home?
The estimated market value will still be reviewed based on the updated and existing records of your property and sales of similar properties. It is best for the appraiser to review the interior. Changes to assessed market value require an interior inspection.