The Appraisal Process
Mass Appraisal vs. Fee Appraisal
Appraisal is an attempt to estimate the value of a property. Mass appraisal (what the county assessor's office does), is the appraisal of groups of properties as of a given date using standard procedures. Fee appraisal (what is often requested by banks or individual property owners), is valuation of a particular property at a given time.
In other words, for mass appraisal, similar products are valued similarly using data and information, while a fee appraisal is specifically done for an individual property considering specific factors and based on a particular point in time.
1. Classify the property
The assessor determines the classification according to current use for each parcel. For instance, property may be residential, agricultural, seasonal recreational, rural vacant land, apartment, commercial or industrial, to name a few. Each classification is taxed at a different percentage of market value set by the Legislature.
2. Estimate the value
The law specifically requires the assessors view each parcel to appraise its market value. Market value is the price that would prevail under a competitive open-market condition. In addition to market changes, numerous physical modifications may affect the value. All significant factors are considered in estimating the value of property. State law requires that the value and classification be established as of January 2nd of each year. The appraiser works throughout the year to estimate the market value of each property for the following assessment.
a. View the property
Under Minnesota Statute 273.08, the appraiser is required to physically review each property at least once every five years (this is known as a quintile). The appraiser may visit your property at shorter intervals for any of the following reasons:
- To view new construction. The appraiser may stop each year until all construction is complete. Improvements that are under construction as of January 2nd will be valued according to the extent completed as of that date.
- To complete a review appraisal for an appeal, such as the Local/County Board of Appeal & Equalization, Open Book Meeting, or Tax Court petition.
- To review the property at the owner's request.
- To review the property at any time the assessor feels that property information may be in error and/or an incorrect value may have been placed on the property.
M.S. 273.20 "Any officer authorized by law to assess property for taxation may, when necessary to the proper performance of duties, enter any dwelling-house, building, or structure, and view the same and the property therein. Any officer authorized by law to assess property for ad valorem tax purposes shall have reasonable access to land and structures as necessary for the proper performance of their duties. A property owner may refuse to allow an assessor to inspect their property. This refusal by the property owner must be either verbal or expressly stated in a letter to the county assessor. If the assessor is denied access to view a property, the assessor is authorized to estimate the property's estimated market value by making assumptions believed appropriate concerning the property's finish and condition."
b. Gather information
The appraiser gathers information on all characteristics of the property that affect market value, including but not limited to: size, location, age, condition, quality of construction and other features.
c. Analyze sales and determine value
Each year the assessor analyzes actual sales of properties in each community. Sales in a 12-month time period (October 1 to September 30 of the previous year) are reviewed and verified. These sales are used as a guide to help determine what similar properties would likely sell for if they were placed on the open market. Department of Revenue guidelines require that the overall level of assessment be between 90% - 105% of sale price.
3. Mail valuation notices
The Assessor's Office mails a Value Notice to each property owner in March of every year. The valuation on January 2nd forms the basis for the the following year's tax. For example, the value and classification on January 2, 2023 are used in the calculation of taxes payable in 2024.