HOW TO ESTIMATE A PROPERTY MARKET VALUE
THROUGH SALES AND TAX ASSESSMENT
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Sample: “Taxes divided by Mil Rate to reach municipal assessed value”
SW Harbor 10.00

Based on a Mil rate:  .010 ($10 per thousand)

Taxes:  1000

1000 divided by .010 = Assessed value:  100,000

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Samples: “Assessed value to sold price ratio”

Each town has a different mil rate.  The mil rate is based on the town's budget.
Find out the mil rate of the town.  All sales have to be within the town.  
Find 5 or more sales then perform the following:

                       


Property
sold for:  125,000

Assessed Value:  100,000

100,000 divided by 125,000 = 0.80%


Property
sold for:  250,000

Assessed Value:  225,000

225,000 divided by 250,000 = 0.90% Borderline




Property
sold for:  700,000


Assessed Value:  525,000

525,000 divided by 700,000 = 0.75%


Property sold for:  399,000

Assessed Value:  380,000

380,000 divided by 399,000 = 0.95%
Extreme (no good)



Property sold for:  410,000

Assessed Value:  225,000

225,000 divided by 410,000 = 0.54%
Extreme (no good)


Property
sold for:  275,000

Assessed Value:  225,000

225,000 divided by 275,000 = 0.81%




Out of the 6 sales, 2 were extreme (54 & 95) and the (90) was borderline.
3 sales: The sum of 80 +75 + 81 divided by 3 gives a mean average of 78.6 ratio.
Result:  A house assessed at 300,000 divided by .786 = 381,679- say $381,500 estimated market value

4 sales:  The sum of  80 + 75 + 81 + 90 divided by 4 would give you a mean average of 81.5 ratio.
Result:  A house assessed  300,000 divided by .815 = 368,098- say $368,000 estimated market value
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FOOTNOTE: 
Dividing the total of  6 ratios,
 
54 + 80 + 75 + 81 + 90 + 95 = 475 / 6 = 79.1 ratio.  300,000 divided by .791 = 379,266.    This indicates the town mil rate at about 79% of value.

Each town has a different mil rate.  The mil rate is based on the town's budget.

Although state law requires every town to be as close to 100% as possible, very few are. Therefore the assessment value compared to sold price is a good solid way to determine market value within a municipality.