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General Information How is real property assessed? Real property is assessed at the fair market value.  The fair market value of a property is the amount that a willing seller would accept and a willing buyer would pay in an open market within a reasonable market time period.  Appraisal Methods There are three standard methods for estimating the fair market value: 1. Market Approach The subject property is compared to sold properties with similar characteristics using sales in which both buyer and seller acted without undue pressure.  This method is normally used to value residential, vacant, and farm properties. 2. Cost Approach Using today’s labor and material prices, the cost to replace the structure with a similar one is calculated.  If the structure is not new, the assessor determines how much it has depreciated since it was built.  The resulting value is added to an estimate of the market value of the land.  This method is used to value new improvements, special purpose and utility properties. 3. Income Approach The value of the property is determined based on an analysis of how much income a property, like an apartment building, store, or factory, will produce if rented.  Operating expenses, insurance, maintenance costs, financing terms, and how much money owners expect to make on this type of property are considered.
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