If you own a home in Michigan, you’ve probably seen a State Equalized Value (SEV) on your annual
assessment notice or property tax records.

Because Michigan property is generally assessed at 50% of its true cash value, it’s easy to assume that
doubling the SEV tells you exactly what your home is worth.

SEV: $175,000
Double the SEV: $350,000

Does that mean the home would appraise for exactly $350,000?

Not necessarily.

Your SEV and a professional real estate appraisal are related to property value, but they are created for
different purposes and through different valuation processes. As a result, they may arrive at different
numbers.

What Is SEV in Michigan?

SEV stands for State Equalized Value.

Michigan law requires real property to be assessed at 50% of its True Cash Value. True Cash Value is
essentially the property’s usual selling price in the market.

A local assessor establishes an assessed value for the property. After the equalization process is
completed, that value becomes the property’s State Equalized Value.

Because of the 50% assessment level, doubling the SEV can provide a rough indication of the value being
placed on the property for assessment purposes.

But it should not automatically be treated as the property’s current appraised market value.

What Is an Appraised Value?

An appraisal is an independent opinion of a property’s value as of a specific date.

For a residential appraisal, an appraiser analyzes the individual property and relevant market data.
Depending on the assignment, this may include:

• The home’s location
• Above-grade living area
• Age and condition
• Quality of construction
• Bedrooms and bathrooms
• Finished basement areas
• Garages and outbuildings
• Lot size and acreage
• Renovations and improvements
• Unique property characteristics
• Recent comparable sales
• Current neighborhood and market conditions

The appraiser then analyzes the available market evidence and develops a supported opinion of value for
that particular property.

Why Can SEV and Appraised Value Be Different?

One of the biggest differences is how and why the values are developed.

Assessors are responsible for valuing a large number of properties within a municipality for property-tax
assessment purposes. An assessor must maintain equitable assessments throughout that jurisdiction.

A residential appraiser, on the other hand, is typically analyzing one particular property for a particular
assignment and effective date.

An appraisal can therefore involve a more property-specific analysis of recent comparable sales, condition,
improvements and characteristics that influence how buyers are currently reacting to homes like yours.

That can lead to differences between an appraisal and the value suggested by doubling the SEV.

What If My Home Has Been Updated?
This is another reason the numbers may differ.

Imagine two similar homes in the same neighborhood. One has an original kitchen and bathrooms and
needs substantial updating. The other has been extensively renovated.

Their assessment records may not fully reflect the same differences that buyers recognize in the current
market.

During an appraisal, condition and improvements can be considered along with comparable sales and other
market evidence.

However, it’s also important to understand that the amount you spend on an improvement does not
necessarily equal the amount it adds to your home’s market value.

A $50,000 renovation does not automatically increase an appraisal by $50,000. The appraiser analyzes
how the market responds to those improvements.

What About Taxable Value?

This is where Michigan property values can become especially confusing.

Taxable Value is different from both SEV and appraised value.

Taxable Value is the figure generally used to calculate property taxes.

Under Michigan’s Proposal A system, increases in taxable value are generally capped while a homeowner
owns the property, subject to certain exceptions. After a transfer of ownership, taxable value may become
uncapped and reset in relation to the property’s SEV.

Because of this system, a homeowner who has owned a property for many years may have a Taxable
Value substantially below the property’s SEV.

Neither number should simply be substituted for a professional appraisal when an independent opinion of
current market value is needed.

Can I Just Double the SEV to Determine What My House Is Worth?

You can use it as one piece of information, but doubling the SEV is not a substitute for an appraisal.

For example, suppose a property has:
SEV: $200,000
Doubling that number gives you $400,000.

That tells you something about the value being used in the assessment process. It does not guarantee that
buyers in today’s market would pay $400,000 or that an appraisal would conclude the property is worth
exactly $400,000.

An appraiser may analyze recent sales and property-specific information and conclude that the market
value is higher or lower.

Which Value Matters When Selling Your Home?

If you’re trying to determine an appropriate selling price, current market data is much more important than
simply doubling your SEV.

A pre-listing appraisal can be particularly helpful when:

• The property is unusual or difficult to compare
• There are few recent comparable sales
• The home includes significant acreage or outbuildings
• The property has undergone substantial renovations
• Family members disagree about the property’s value
• You’re considering selling the property privately
• You want an independent opinion of value before listing

Which Value Matters for a Divorce, Estate or Other Legal Matter?
These situations often require an independent opinion of value rather than relying on the property’s tax
assessment.

The appropriate value may also need to be established as of a particular date, rather than today’s date.

For example, an estate may require a retrospective appraisal estimating the property’s value as of the date
of death.

Divorce proceedings may also require an independent appraisal to help establish the value of real property
being considered in the division of assets.

The Bottom Line

Your Michigan SEV can provide useful information about your property’s assessment, but it shouldn’t
automatically be interpreted as half of what your home would appraise for today.

SEV, Taxable Value and Appraised Value serve different purposes.

When an accurate, independent opinion of a property’s market value is important, a professional appraisal
provides a property-specific analysis based on relevant market data.

Need to Know What Your West Michigan Property Is Worth?
Michigan Home Appraisal provides independent residential appraisal services throughout the West
Michigan area for homeowners, buyers, estates, divorce proceedings, pre-listing decisions, PMI removal
and other valuation needs.

Contact Michigan Home Appraisal to discuss your property and determine which type of
appraisal is appropriate for your situation.