Assessed Value

Assessed value is the dollar amount a local tax assessor assigns to a property as the basis for calculating annual property taxes. County assessors determine this figure using mass appraisal methods — comparable sales data, property characteristics, and assessment ratios set by the jurisdiction — and update it periodically, though not necessarily every year. In many states, the assessed value is a percentage of the property's estimated market value rather than the full amount.

For mortgage note investors, assessed value is a useful but imperfect data point during due diligence. It provides a quick reference for estimating property value at no cost, but it should never be treated as a substitute for fair market value. Assessments can lag behind current market conditions by several years, and assessment ratios vary widely by jurisdiction — a property assessed at $80,000 in one county may carry a very different relationship to its true market value than a property assessed at $80,000 in another. Note investors use assessed value as one input among several when screening deals, but rely on BPOs, AVMs, and appraisals for pricing decisions.