• What is the difference between a Real Estate Appraisal and an Assessment?
While real estate appraisals and assessments both relate to the value of a property, the two forms of valuations differ greatly both in the manner in which the values are derived and in the intended purpose of the valuation.
Assessments are used to form the basis of local property taxes while a real estate appraisal is used to determine the most likely sales price the property would bring on the open market.
Assessments are developed by tax assessors using mass appraisal techniques that compare the values of groups of properties as of a given date and form the basis of the property tax levied by the local taxing authority.
While Wisconsin law requires an annual assessment (collection) of taxes, tax assessments (the comparative valuation of properties) in the state are updated at least once every five years according to property classification such as residential, agricultural, forest, etc.
A real estate appraisal involves a more timely and detailed examination of an individual property and is used to determine the current market value for mortgage lending, or decisions related to buying and selling.
An appraiser will take photographs, draw sketches and make notes of important individual property characteristics for use in comparisons to other, similar properties that have sold within six months to a year.