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Board of Appeal and Equalization Handbook <br />Assessor determines classification <br />Along with estimating the market value of each property, the assessor must determine the classification, or use, of each <br />parcel of property. Property classifications are defined in Minnesota Statutes, and the assessor classifies the property based on <br />its use as of January 2 of each year. Examples of classifications include residential homestead, residential non-homestead, <br />apartment, commercial and agricultural. <br />Assessor reviews sales ratio <br />Assessors analyze the sales in a community in order to understand local market trends and provide direction in estimating <br />values. Whenever real estate is sold for more than $1,000 a certificate of real estate value (CRV)must befiledinthe <br />countyinwhichthepropertyislocated. <br />The assessor uses CRVs to analyze actual sales of property and to complete sales ratio studies for each community and <br />for each type of property. The ratio is determined by dividing the EMV by the sale price. The assessor uses the sales as <br />guides to estimate what similar properties would likely sell for on the open market. It isimportant to remember that one <br />sale, taken by itself, does not necessarily reflect the actual real estate market in a jurisdiction. <br />In addition to the sales ratio study conducted by the assessor, the Department of Revenue conducts asimilarindependent <br />sales ratio study for the jurisdiction to monitor how close the median ratio is to the required level of assessment and is used <br />by the State Board of Equalization. The Department of Revenue’s sales ratio studies should be the same or similar to the <br />studies conducted by theassessor. <br />10 <br /> <br />