Why do assessors avoid considering foreclosure or estate sales when calculating assessments?
First and foremost, since assessments need to be equitable and fair, we do not change an assessment to match any single sales price, even if it is an open-market, arms-length sale.

Assessments are based on “typical and usual” prices for each type of property, and a single “non-market” sale doesn’t tell us much about that. To find the typical market price range, we need to look only at open-market, arms-length sales over time.

To help determine which prices are “typical and usual” prices, the Wisconsin Legislature and Court system have developed a test to make sure that we do not consider non-market sales in our analysis. They recognized that certain property sales occur under unique or unusual circumstances and are therefore not good indicators of what the open market is doing.

According to their test, you can identify an open-market, arms-length sale if:

1. No personal, business or other relationship exists between the buyer and seller. This is known as the “arms-length rule”. (if you already know each other, there is a high likelihood that you were willing to make a deal which was not available to others)

2. Both buyer and seller came to the deal freely and were not under any undue compulsion or duress to act. This is known as the “no pressure rule”. (Includes foreclosure, sudden job change, divorce, death of owner or the need to liquidate assets fast to get cash, etc.)

3. Both the buyer and seller know what “going prices” are and can negotiate with full knowledge of current market conditions and are acting in their own best interests. This is known as the “market knowledge rule”

4. The property was marketed for sale in a typical way for a typical period of time in an open-market. If it takes 10 months to sell a Cape Cod that is priced right in the current market, 6 months at a high price is not typical. This is known as the “equal exposure rule”.

5. Payment is in cash or its equivalent in typical market terms. Sale price should be free from special, creative or unusual financing arrangements or concessions for any interested party. Unusual financing terms have a dramatic “non-market” effect on sale price because all buyers do not have access to similar financing considerations. Therefore the price cannot be considered to be typical of the market. This is known as the “market-finance rule”.

All open-market, arms-length sales are considered together, along with property income and construction cost data if needed, to determine the range of values that will be assigned to individual properties as their assessments.

In this way, we try never to use just one sale (either high or low) to determine assessed value. This “normalizing” process does often result in assessments being different than recent sale prices, but it is an important step since the law requires us to make sure that similar properties have similar assessments.

Show All Answers

1. What does an Assessor Do?
2. What are property taxes for?
3. What do the terms on the tax bill mean?
4. What is a Revaluation?
5. What is a “valid” or Market Sale?
6. How do I know if my assessment is fair?
7. I have recently built a new home. Will cost to build my property be considered when my assessment is calculated?
8. The Estimated Fair Market Value shown on my tax bill is more than I think my house is worth, what do I do?
9. Does the location of my property influence its value?
10. If after discussing my assessment with the Assessor’s office staff I still think the assessment is not correct, what should I do?
11. What happens if you review my property after I buy it or take out a building permit; if you discover something that isn’t on your records, will my assessment increase?
12. Can my assessment change in the years between citywide revaluations?
13. Can the assessment on my property be changed even if the assessor has not been inside my property?
14. How can my assessment change when I haven't done anything to my property?
15. Will I be notified if there is a change in my assessment?
16. I just purchased my home for less (or more) than the assessed value. Will you change my assessment to match my sale price?
17. The family across the street was foreclosed on by the bank who sold their home for a lot less than the assessed value; isn't that proof my assessment should be lowered?
18. If market values do go down, doesn’t that mean our taxes should decrease along with them?
19. What if I think my assessment might not be Correct?
20. Why am I paying taxes on an assessment that's higher than my property is worth?
21. How does the assessor value property?
22. I have a refinance appraisal – Will you change my assessment to the appraiser’s value?
23. Why do assessors avoid considering foreclosure or estate sales when calculating assessments?
24. What will happen to my assessment if I improve my property?
25. Will my assessment go up if I repair my property?
26. How does my assessment affect taxes?
27. Do the market values of all properties change at the same rate and over the same time frame?
28. What happens after the Board of Review makes its decision?
29. What is the Board of Review?
30. What is the Board of Review and what evidence do I need to present during a hearing?
31. I have heard that property values have gone down dramatically all across the Country recently, how does West Allis compare?