What is the biggest misconception in Calgary Real Estate?
Without question, its the general misunderstanding about your home's City Assessment. Every single client we sit down with assumes the City Assessment is 100% equal to the true market value of their home. WRONG!
Let's find out why:
City Assessments
Calgary property assessments estimate value based on the analysis and interpretation of the Calgary Real Estate Market on the valuation date - July 01, the year prior to taxation. The City of Calgary uses a method called mass appraisal to calculate market value for residential properties. This mass appraisal technique values many properties as of July 01 of the previous year, using real estate sales data and allowing for statistical testing.
In summary, it is a general approach utilized to estimate a tax valuation for the City.
Market Value
To evaluate property values correctly, we need to combine
1) Very recent sales data (90 days or less)
2) Specific property details
3) Current market trends
Mass Appraisal techniques overlook an incredible amount of information fundamental to your property value. Some of these include the following:
- Current Market trends - sales / inventory / economics
- Specific property location (including proximity to green spaces, community services, access, views, traffic, area development, etc)
- Total finished floor area of a home
- lot size
- basement development
- quality of upgrades
- condition of home
- repairs needed
- age of building
- existence and type of garage
- legal vs illegal suites
- quality of renovations / repairs
- warranty
In summary, we need to analyze a combination of recent real estate sales data together with specific property details; something the City cannot complete.
Overall it is IMPOSSIBLE for the City to accurately assess a true market value for every home in Calgary.
Why does this matter?
Property Value is incredibly important and the City confuses most homeowners by being inaccurate. We have seen Assessments go both ways - sometimes overvalued and sometimes undervalued. Of course, most clients are very upset when they realize their true market value is less than the City Assessment.
Remember, the goal for the City is to collect taxes - not to evaluate your home value within a small threshold of error. Do you believe the City cares what your home is worth?
For example, if the assessment goes down, they will adjust the tax rate so you still pay the taxes as per the City budget. Too many times, we have had clients challenge market value with their printed City Assessments but they forget that at the end of the day, the City only cares about collecting revenues.
I want you to be informed, and it's part of my commitment to you!
Any questions, I am always available!
) | Sincerely, Your Realtor Denis Hrstic |