Are You Looking at the Right Assessed Value?

Many home buyers use the assessed value of a property as a guage to determine whether an asking price is reasonable or when trying to determine its market value. And many listing agents are putting remarks in their listings such as, "Priced $90K below assessed value!".

But are they using the right assessed value?

When looking at listing agent's remarks such as that one and then the assessed value of the property, I often find that the agent used the 2008 assessed value in their calculation - not the 2009 assessed value as they should. If you look at the 2009 assessed value (which is, on average, 12 percent less than 2008), you'll see that the property is nowhere near "$90K below assessed value" as the listing agent and seller claim. (Of course the property is priced below its assessed value as of January 1, 2008 – DUH!)

Regardless of whether this was a" simple oversight" by the listing agent and seller or something else, it can be misleading. That's one reason why every buyer (and agent) should verify any such claim. 

Also be careful when looking at assessed values shown on listings on real estate search sites. Many of them pull their data from MLS's and/or public tax records. But the data in those is not necessarily accurate. For example, the tax records that are incorporated into the local MLS in this area do not yet have the 2009 assessed values listed (even though they came out a while back).

If you'd like to see what the 2009 assessed value of properties is, here's where you should go:

Loudoun County real estate tax, assessement and parcel database 

Fairfax County Department of Tax Administration's Real Estate Assessment Information Site

Prince William County Real Property Assessment Site

Loudoun Assessor Speaks About 2009 Assessment Appeal Process

The Loudoun County Assessor, Todd Kaufman, spoke about the 2009 assessment appeal process today at the Dulles Association of Realtors office in Leesburg, VA. The packed "Lunch and Learn" event was catered by Charles Fincher of Monarch Title (thank you Charles).

Here are some of the highlights I took from the presentation:

• Bank-owned properties and short-sales are "not considered" when coming up with assessed values yet, they "are sometimes" – ?!
• The appeal process is meant to "not be adversarial"
• The Loudoun Assessor's Office "welcomes more information about properties in order to get the assessed values correct"
• The Assessor's Office only has 18 appraisers that have to assess all 115,000 properties in Loudoun
• The assessor uses public data to determine assessed values (automated process)
• The goal of the Loudoun Assessor's office is to physically review 25 percent of all properties in Loudoun, but that does not mean going into the property – only seeing it from the outside.
• If you win your appeal with the Board of Equalization (BOE) and your assessment goes down, Loudoun County may take you, the property owner, to court to fight the BOE's ruling. The BOE is out of the loop, but the property owner is now on the hook and takes the heat for the BOE's ruling
• Loudoun Assessor says that his office never has nor ever will refuse to look inside of a property if asked to do so. Only home owners have refused to let Assessor's Office in 
• The online Application for Review Form has come a long way – it's much more user friendly and auto-populates once you enter your property PIN into the form

And here are the five steps to appealing your Loudoun assessment…

1. Review notice of assessment via snail mail or online. The notice will include schedule/steps regarding appeal process
2. Submit an Application for Review Form postmarked no later than March 6 (you can also complete it online). Important: If you choose to appeal the assessed value based on market value, you must have the details of three comparable properties and an opinion of true market value ready to submit along with the Application for Review Form (contact me if you need a list of comparable properties and/or a determination of market value for your property)
3. Written request for consideration on current assessment or previous assessments (up to 3 years) based on an erroneous error
4. Formal appeal to Board of Equalization (BOE). Postmark deadline for appeal consideration by BOE is June 1
5. Formal petition of appeal through Court system

Further Details

The Review Process

• Goal is to provide convenient and uniform review process allowing informal discussions regarding assessments
• Petitioners must address concerns regarding property value and provide empirical evidence why assessment may be incorrect. Burden of proof legally on property owner. Assessment deemed correct unless petitioner illustrates otherwise
• Appeals documented become part of assessement record (aka what you tell the assessor's office becomes public data). Automated Application for Review Form provides non-adversarial platform for public to communicate assessment concerns
• Property owners encouraged to discuss concerns with staff prior to filing formal appeal through BOE or courts

Reconsideration of a Prior Assessment

• Property owner requests correction to property record which may impact assessment for current and prior years
• Example: garage demolished or added several years earlier. May not have been recorded because property owner did apply for permit. Property owner can seek relief from Assessor to correct current assessment and up to three years prior assessments.
• Relief granted if sufficient evidence formally provided in writing substantiating need for change in the assessment

Board of Equalization

• Opportunity to appeal to a local, independent group that may adjust value (current year only)
• BOE has 5 member, court appointed citizens panel. Consider equity and market value. BOE prohibited from making erroneous changes without support or evidence
• Petitioner must provide evidence establishing that assessment is incorrect based on comparable sales or by establishing inequity. Application for appeal must be in writing
• Properties can be adjusted by BOE if error disclosed, even if property owner did not appeal assessment

Court

• Last element in appeal process
• Adversarial process which typically requires petitioner to hire an independent fee appraiser and legal counsel
• Formal appeals such as these are expensive and time consuming for both the property owner and the County