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Home listing prices vs. tax assessment
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Anonymous
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Somebody enlighten me! We are just starting to look for a house to buy and I'm seeing pretty large discrepancies between listing prices and the tax assessment - much higher listing prices. Just for example, a home in Burke listed for $450,000 with a 2010 tax assessment of $382,480. Is it common for these to be so different? Does it mean the home is over-priced? Is a loan going to be approved for the purchaser if there is that big of a difference?
thanks! |
Anonymous
It is very common for the tax assessment to be lower than the fair market price or the listing price. Very common. As an owner, that's what you want. The tax assessment does not matter for the loan, the appraisal does. It varies by neighborhood, but in my zip, homes generally sell for 120% of tax assessed value. |
Anonymous
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Conversely, if the market drops and your home was assessed at a higher value than the current market, in most cities you can request that your house be re-assessed. I did this twice in California and save hundreds of dollars in taxes.
When the market goes back up, so will my taxes, but for now it helps. |
Anonymous
| Yep. Normal. Our tax assessment is about $150k less than our recent assessed value for our refi. We're quite happy with this because it makes our taxes lower. |
Anonymous
| Note that in some jurisdictions when the home sells for more than the assessed value they will immediately re-assess up to the sale price (so the amount they quote you for real estate taxes may go up). |
Anonymous
| OP, there is no relationship between the two. You need a realtor who knows the area, and you should do your homework to figure out what comparable houses have sold for recently. |
Anonymous
| The tax assessments for my Arlington neighborhood are a good 300k below what the current market value runs...thankfully. |
Anonymous
but you can challenge it. This happens in our hood and you can document your 'assessed' value versus the other 99.9% in your hood and get it knocked back down. |
Anonymous
IME, that doesn't work in MoCo (and it's kind of silly that it would work anywhere) |
Anonymous
| Our home was a foreclosure and we paid significantly less than the assessed value. |
Anonymous
It worked for us. Doesnt your county have a formal appeals process. Ours does...and it allows up to 5 comparable assessment submissions. |
Anonymous
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I am a real estate attorney and did about 2000+ transactions in DC, MD and VA last year. Tax assessment has no relation to actual value. It should but it doesn't. There are no rules for a relation between the tax assessment and actual value (even for localized geographic areas).
Likewise, when you purchase you should always base your property taxes on the higher of the current value or the price you pay. |
Anonymous
Yes MoCo has an appeals process, but they (rightly) see their job as figuring out what the property would sell for, so if there is an actual purchase price they will always take that as more representative of what the property should be assessed at regardless of what other nearby properties are assessed (and in later year those other properties may well get assessed upwards towards market value). On the other hand, they did lower my assessed value this year, so it's not as if they are simply trying to max out the value no matter what. |
Anonymous
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In Fairfax County, apparently you can have an old house bigger than your neighbor's new house and pay less taxes than the new house, even though it is smaller. Then you piss your neighbor with the new house off. And they report you for tax fraud. Back taxes suck. Some people in my neighborhood in an old house like mine, but much bigger with add-ons, had to sell and move because of back taxes. You don't want that. |