What is "Market Value"?
Minnesota Statute 272.03 defines "market value" as "the usual selling price... at the time of assessment". It is "the price that could be obtained at a private sale of an auction sale, if the assessor determines that the price from an auction sale represents an arms-length transaction. The price obtained at a forced sale shall not be considered".
In other words....
Market value equals the price that would prevail under competitive, open-market conditions.
When does the assessor determine market value?
State law requires that the value and classification of real estate be established annually as of January 2nd of each year. The Assessor's Office works throughout the year to estimate the market value of each property for the following January 2nd.
How does the assessor determine market value?
There are a varying number of factors that are used when determining a property's market value many of which depend on the type of property (i.e. residential, commercial, agricultural, etc...) Some of these factors are listed here:
- Views Property - Approximately every fifth year, an appraiser will view the property. This is in addition to new construction, alterations or improvements that will be viewed in the current year. All appraisers will have Steele County identification credentials.
- Gathers Information - The appraiser gathers characteristics of the property that affect market value, such as, land size, building size, age, quality, basement finish and extra features (i.e. fireplaces, extra baths, walkouts, etc).
- Estimates Value - The property characteristics are entered into a computerized system. The computer aids the assessor is estimating the property value. Information from actual sales is used to update your market value. The market value estimated by the assessor should be at, or very close to, the amount the property would sell for if placed on the open market as of January 2nd for that given year. The State Board of Equalization requires the overall level of assessment to be between 90% and 105% of market value. Appraisers in Steele County consistently meet this standard.
- Notification - A Value Notice is mailed in the spring to each property owner. The assessment on January 2nd forms the basis for the following year's tax.