A Comparison of True Market value and Assessed value

The value of your personal or real property is subjective, in that it is just an educated guess of the value of such property. To complicate the matter, the true market value or the assessed value of a particular item changes constantly due to the demand for the item and the overall condition of the economy at any given point of time. As a result, a particular item can be sold for more or for less than the assessed value or the true market value of the item in question.

Then again, subsequent sales of similar items does cause a change of the assessed value and also the true market value of those items and such sales data does serve to establish a base price for the item in question. As such, the true market value of an item in question is the actual sales price of that item. In other words, if you have a similar item you now have some idea what you should ask for that item. However, it is true that a buyer will, in most cases, offer less than the true market value for the item, in hope that you need the cash and are willing to take the amount of money that was offered.

Therefore, an item is worth only what a willing buyer will pay for the item and what a willing seller will accept for the item. Here is the bases for the establishment of an assessed value for Real Estate tax purposes. The sales prices of similar homes are used to determine the assessed value of other similar properties that will eventually be sold at some time in the future.The resulting Real Estate tax is due and payable based on the assessed value of each property in question. The use of objective sales data is used to establish a subjective value of a similar property. Such a value is determined to be subjective because the property is not sold and thus subject to change at any time in the future. 

The true market value of your property is the last know sales price for a similar item. The accuracy of that value depends on how long ago such a sale took place. If such a sale took place more than a year ago it is quite likely that the true market value is no longer an accurate measure of the value of your item. As a result, if you do sell the item in question you will establish a new true market value which will be used to value similar items. That new true market value can then be used to establish the assessed value of similar properties that might or might not be sold in the near future.

If you have not already guessed, you can ask whatever you want for a particular item and if a willing buyer will agree to purchase and, in fact, does purchase that item because the sales price was agreeable to you, that item becomes a sold item of value, no matter what the true market value or assessed value of such an item might be at the time of sale.