Yesterday I posted a graph showing the difference between assessed value and market value. Today I have one more real-life example of this phenomenon. The property below was assessed at $210,000, and after my tax appeal process I determined the home to be worth $130,000. That’s quite a difference and represents roughly $800 in taxes. Ouch.
The subject property is around 1400 square feet and all blue dots above represent the past 2.5 years of neighborhood sales between 1200-1700 square feet. This range of square-footage is meant to show comparable properties to the subject since a typical buyer would likely look in this range when house hunting. The vertical line represents January 1, 2009, which is the date of assessment.
As you can see, an assessed value at $210,000 looks higher than basically all sales in the neighborhood, and actually more consistent with a home value from previous months or years. It’s true that a property can sometimes sell at the highest level in the neighborhood, but the subject property does not warrant such a circumstance. When observing recent sales above $150,000 in the market, it’s clear that the vast majority of these sales come from superior tracts in the market area or are remodeled throughout (sold above all other sales because of upgrades).
I am not saying the Assessor’s Office gets it wrong in every case. That’s not true, and I certainly do not wish to vilify the Assessor because that’s not the way I do things. I’m simply saying that in this case, and in others I have worked on lately, assessed value should have been much lower. I typically take on tax appeal situations where the home owner is clearly over-assessed, and so there is an obvious potential economic savings to be had. Most of the properties I did not take on this year were assessed fairly well or off by 5-10% (too high).
If you have questions, give me a call at 916-595-3735.
www.SacramentoAppraisalBlog.com The Assessor says $210k, but Market Value is $130k: A Real Life Property Tax Appeal Situation
I like the graph! In NH, the assessors use an equalization ratio…but even that is off around here. -Jenn
Thanks AppraiserJenn. It’s a safe bet that no system will be perfect. It’s a good thing there is a formal appeals process set up.
Love the scatter chart on this one – really hard to argue from the side of the tax assessor when presented with this along with your formal appraisal of the property.
Thanks so much Alison. It’s always nice to visually show data in the market. It is very hard to argue with that. I’m preparing an appeal this afternoon and it’ll be in the same situation as this one, though a different neighborhood in Sacramento.
Take care.