Assessed value CAN be LESS than the sale price
The purchase price may not represent the actual value of the property. For the subject property itself, similar adjustments to .cleanse or purify. the sale price may be appropriate and result in .actual value. differing from market value. The sale price of another property may have to be adjusted in analyzing that property if it is to be used as a comparable sale, either on the basis of price per sq.ft. or as an example of a capitalization rate to be used in the Income Approach.
It is necessary to cleanse the purchase price prior to its use in the analysis. Listed below are factors that could affect the sale price and hence should be adjusted for in any analysis.
Special Financing
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Special Terms
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Partial Interest
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Contractual Rents
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Marriage Value
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Non-Assessables
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Share Transfer
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Market Change
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Purchaser's Assumptions
A further factor is EQUITY. The purchase price may not be at the same level of assessment as the other properties in the area.
