VALUING / APPRAISING YOUR REAL PROPERTY

The tax rates are calculated by the County Clerk’s Office and are dependant on the financial needs and budgets submitted and approved by your City, County Government, and school Districts.

The County Treasurer’s Office is responsible for the collection of all taxes.

THE THREE APPROACHES TO VALUE

One of the duties of the County Appraiser’s Office is to place value on all taxable property within Sedgwick County. There are three approaches or ways to place value on assessable property. The three approaches are Cost, Income and Sales.

Not every approach is pertinent to the property being assessed. In real estate the type and use of the property determines which approach is best suited to help the Appraiser arrive at fair market value.

COST

The cost approach to value is based on the concept that the value of a property can be estimated or appraised by adding the value of the land (as if vacant) to the value of the improvement.

The cost approach is a way to value your property based on how much money it would take, at current material and labor costs, to replace your property with one similar. If your property is not new, the appraisal office must also determine how much it has depreciated. In addition, the appraisal office must estimate how much a lot like yours would be worth if vacant.

The cost approach is primarily used when sales or income data for properties is not available or scarce.

INCOME

The income approach to value is the appraisal concept that the value of a property is related to how much income the property will produce over a duration of time. Also the certainty of the income is taken into consideration. This approach is best used for properties that produce income, such as, apartment complexes, office buildings and other rent producing property. Within the income approach are several different ways or techniques that appraisers use to value property.

For the income approach to be valid the Appraiser must have accurate and current information on market rents/leases, vacancy rates, interest rates on mortgages, expenses that the property accrues, investor expectations, and other economic factors and trends that affect income generating property.

MARKET

The market approach to value, also referred to as comparative sales approach, compares the property being appraised (subject) with other properties with similar characteristics (comparables) which have been sold within certain time limitations. The comparable sales must be valid sales: that is, they are arms-length transactions, with a willing and knowledgeable buyer/seller, sold on an open and competitive market with sufficient time for sale.

The market approach involves making adjustments to the comparable properties. These adjustments allow the differences between the subject and the comparable to be accounted for. The value for the adjustments or components (bedrooms, fireplaces, living area, and other characteristics) come from the local market. Through research and collection of sales data the Appraiser tracks and updates what buyers/sellers (the market) are saying the component is worth.

The use of computers has made the selection of comparables and the use of valid sales more systematic and accurate. The sales comparison method is the most reliable method for the Appraiser’s Office to use in the mass appraisal of residential property.

WHY DO APPRAISED VALUES CHANGE FROM YEAR TO YEAR?

A property’s value can change for many reasons. The most obvious is that the property changes. A bedroom, garage, or swimming pool is added, or part of the property is destroyed by flood or fire. A change in market can also cause a change in the property values.

WHY HAVE A PROPERTY TAX?

Properties are appraised so those of us who want the advantages of having schools, fire and police protection, can absorb our fair share of the cost, in proportion to the amount of money our individual properties are worth.

The property tax is part of a well-balanced revenue system. It is more stable than sales and income taxes because it rarely fluctuates.

HOW IS PROPERTY APPRAISED?

To find the value of any piece of property, the appraisal office must first know what properties similar to it are selling for, what it would cost today to replace it, how much it takes to operate or keep it in repair, what rent it may earn, and many other factors affecting its value.