I had a professor in B-School who at the end of a class session would, as students began coming to the conclusion that he wanted all along, remark, “I love it when a good plan comes together.” Well, I feel that way today. On March 17, I posted a blog on tax assessments and relative value / perceived value. I argued that sellers should fight with the County / City to raise their assessed value when they go to sell their house as this will provide a higher baseline.
Well, I have a reader who did just this. Perhaps they are not a reader, but I found a listing this morning where this has happened. Look to the right at this copy from their assessments, and I’ll go over what has happened.
So, here is a very nice home in Western Albemarle that was assessed in 2007 for $924,500. In 2008, that assessment dropped to $899,800. Along with the overall market decline in 2008, the 2009 resulting assessment dropped another $39,000 to $860,000.
Enter the owner who wishes to sell his home. I contacted the assessor to ask what “Appraiser’s Review” meant. According to the assessor, the notes in the computer stated that the “owner contacted the assessors office and stated that they believe that the property assessment did not reflect a high enough value.”
Wow. They keep records of why appraiser’s reviews take place. Even better for my purposes. The new assessment reverses two years of declining real estate prices. The new assessment was valid as of Feb 13, 2009 and was entered at $927,600.
On March 4, 2009, the house goes on the market for $1.125 mm. Now, that is still priced at a 21% premium to the tax assessment. Pretty aggressive. But if you go back the official County of Albemarle assessment, we are now 30.7% premium to tax assessment.
Personal thought: neither will fly. BUT… 20% over tax is certainly better than a 30% premium. And if other agents don’t really look through the history of the assessment, they may not even notice the change.
A note to the readers. In the City of Charlottesville, there are no history files available on assessment values for real estate. Only the current assessment is on line. You can contact the assessor’s office and they will give you the historical numbers, but their on-line information does not have the ability to display the history.
If any readers see additional homes like this, let me know, and I’m happy to look at the process.