Brought to you by , Funkhouser Real Estate Group, , scott@HarrisonburgHousingToday.com
Thursday, December 18, 2025
When you're considering a home purchase, you might find yourself glancing at the tax assessment and compare it to the list price.
Sometimes the two numbers line up nicely -- within a few percentage points of each other.
Other times, the difference is a bit more dramatic.
For the sake of this discussion, let's assume the list price of a home reflects its market value. Yes, I know that's not always true -- but it's a useful perspective for considering this topic.
When the tax assessment and market value are rather far apart, there are usually one of two explanations.
1. The home has been over improved in ways the City or County has not fully realized.
If a homeowner has made significant improvements over time -- such as a new roof, replacement windows, updated siding, new flooring, a renovated kitchen or bathrooms, modern lighting, or a new heating system -- the assessor may not be aware of all of those changes.
Some improvements get picked up during reassessments. Others do not.
When that happens, the assessed value can lag behind reality, and the market value (and list price) ends up being noticeably higher than the tax assessment.
In short, the house is worth more than the public records suggest.
2. The home has been under improved in ways the City or County cannot see
The opposite situation also happens quite often.
A homeowner may have owned a property for decades and made very few updates. From the outside, everything looks fine. But inside, the home may need substantial investment just to bring it up to average condition for its age.
In that case, the tax assessment may assume a level of condition and functionality that simply isn't there -- and the market value (and list price) ends up being lower than the assessed value.
Why this happens so often
Tax assessments are based on the assessor's best estimate of value using public records, exterior observations, permits, and broad market data. Assessors typically are not walking through homes.
And without going inside, it can be very hard to know whether a 1950s home feels like a 2020 home… or like a 1900 home.
If a 1950s house feels like a 2020 house, it will probably sell for more than its assessment.
If a 1950s house feels like a 1900 house, it will probably sell for less than its assessment.
The takeaway
When you see a home for sale with a list price that is significantly higher or lower than the tax assessment, don't jump to conclusions.
Instead, let's go take a look at the house if it is of interest.
The explanation is often found inside the home -- in the level of updates, maintenance, and overall condition -- not necessarily in an unreasonable asking price.
The assessment is a useful data point, but it is frequently not an accurate proxy for market value.
Sometimes the two numbers line up nicely -- within a few percentage points of each other.
Other times, the difference is a bit more dramatic.
For the sake of this discussion, let's assume the list price of a home reflects its market value. Yes, I know that's not always true -- but it's a useful perspective for considering this topic.
When the tax assessment and market value are rather far apart, there are usually one of two explanations.
1. The home has been over improved in ways the City or County has not fully realized.
If a homeowner has made significant improvements over time -- such as a new roof, replacement windows, updated siding, new flooring, a renovated kitchen or bathrooms, modern lighting, or a new heating system -- the assessor may not be aware of all of those changes.
Some improvements get picked up during reassessments. Others do not.
When that happens, the assessed value can lag behind reality, and the market value (and list price) ends up being noticeably higher than the tax assessment.
In short, the house is worth more than the public records suggest.
2. The home has been under improved in ways the City or County cannot see
The opposite situation also happens quite often.
A homeowner may have owned a property for decades and made very few updates. From the outside, everything looks fine. But inside, the home may need substantial investment just to bring it up to average condition for its age.
In that case, the tax assessment may assume a level of condition and functionality that simply isn't there -- and the market value (and list price) ends up being lower than the assessed value.
Why this happens so often
Tax assessments are based on the assessor's best estimate of value using public records, exterior observations, permits, and broad market data. Assessors typically are not walking through homes.
And without going inside, it can be very hard to know whether a 1950s home feels like a 2020 home… or like a 1900 home.
If a 1950s house feels like a 2020 house, it will probably sell for more than its assessment.
If a 1950s house feels like a 1900 house, it will probably sell for less than its assessment.
The takeaway
When you see a home for sale with a list price that is significantly higher or lower than the tax assessment, don't jump to conclusions.
Instead, let's go take a look at the house if it is of interest.
The explanation is often found inside the home -- in the level of updates, maintenance, and overall condition -- not necessarily in an unreasonable asking price.
The assessment is a useful data point, but it is frequently not an accurate proxy for market value.
