by Buz Wolfe

Many people interchange the terms “Appraised” and “Assessed”. While there are similarities to these valuations, there are also very distinct differences.

“Appraisal” is a “valuation of property by the estimate of an authorized person”. Real estate appraisals are conducted by licensed and certified real estate appraisers. Real estate appraisers are either Certified Residential or Certified General Appraisers. Federal guidelines outline appraisal process and technique. The overriding guideline is known as USPAP – Uniform Standards of Professional Appraisal Practice.

Lenders are required to obtain appraisals as part of the mortgage financing process. Certified appraisals are also frequently used to determine real estate values associated with estates and divorce proceedings.

There are three accepted appraisal techniques. These are known as the Sales Comparison or Market Data Approach; the Income Approach; and the Cost Approach.

The most commonly used approach in residential real estate is the Sales Comparison or Market Data Approach. This technique involves an appraiser identifying the sales of comparable properties that have actually sold and settled as recently as possible. The appraiser then makes certain adjustments in comparing the features of the comparable sales to the subject property. While these adjustments can be somewhat subjective, they are used to reconcile the value of the property in question.

“Assessment” is “to make an official valuation of property for the purposes of taxation”. In other words, the assessed value of your property determines the amount of real estate tax that you will pay to the taxing authorities. This would be the county/municipal tax and the larger school tax. In our region, the county/municipal tax runs on a calendar year, whereas school taxes are based upon a fiscal or academic year of July 1 – June 30.

Assessors, like appraisers, must be licensed in the Commonwealth of Pennsylvania and must also complete continuing education every two years and work within the USPAP requirements as well.

While the assessed value of your property is supposed to represent Fair Market Value, this is not always the case. Cumberland County assessed values currently date back to 2008. County wide assessments were previously done in 2004 and in 2000. Cumberland County did not update assessed values between 1972 and 2000. When assessed values become outdated, a Common Level Ratio is used to determine the current value.

There are approximately 95,000 taxable properties in Cumberland County. Historically, about 1/3 are under assessed, 1/3 are over assessed and about 1/3 fairly close to actual Fair Market Value.

If you feel that your property is over assessed for tax purposes, there is a procedure by which you can appeal your tax assessment and attempt to get it lowered. This usually involves retaining a certified appraiser to support the appealed value.

In the Commonwealth of Pennsylvania, assessments are conducted at given times on a county wide basis. Properties are not reassessed each time they are sold or conveyed. The exception to this rule would be new construction or properties that experience extensive renovation or repair. Perhaps as many as half of the sixty seven counties in Pennsylvania have not conducted a county wide reassessment for twenty, thirty, forty or even fifty years. The notion of a reassessment is a daunting one indeed. The scope and expense is significant and it is often a political problem for reluctant county commissioners. Cumberland County has done a rather good job in keeping values fairly current and is fortunate to have an extremely professional and competent assessor office.

So, in conclusion, an appraisal should represent the Current Day Fair Market Value of your property. An assessment is a valuation provided by the county for the benefit of the taxing authorities. You would be well advised to check the assessed value of any real estate that you may own to make sure that it is at least fairly in line with actual Fair Market Value. If you suspect that your assessment is too high, you should contact a licensed appraiser to further discuss an Assessment Appeal.

*Perry County Chief Assessor Randy Waggoner and PA Certified General Appraiser Andy Wolfe contributed to this report.
*Ray L. “Buz” Wolfe, CRS has been Broker/Owner of his own firm since 1986. In 2016, he was again the Carlisle Area’s Top Producing Independent Broker.
**All information believed to be accurate but not guaranteed.