Hi Ffx_guy:

How are you doing?

The tax assessment is just "snapshot in time".

Here in Prince William County, assessments, are generally done in The Summer, and as you pointed out, they really don't keep up with the market.

Also, if you had a appraisal contingency in the contract, you weren't obligated to go through with the sale if it was "over market" anyway.

And to top it off, do you know how hard it is to get some offer's approved now? You absolutely bought at a great time! These days in Northern Virginia, many home buyer's face multiple offer situations within weeks or days that a properly priced new listing comes to market.

(We should all be so lucky:)

Enjoy your new home, and Happy Thanksgiving,

Johnny "Culdesac" Yankoviak

One test is to look at the assessed value of the other homes you were interested in, and compare that to their eventual sales price.

Dear Ffx_guy:

In some areas of Fairfax County the market went down a little more this year as compared to last year. But these are very few areas. Most of the county market became stable, and, Fairfax is one of a few counties in metropolitan area, which started experiencing appreciation this summer as compared to summer of last year. E.g. townhomes in Charlestown Subdivision in Springfield 22152 that were in good condition and had some updates sold 10% to 15% higher in summer than in 2008. There were almost no REO properties in Fairfax County this year (last year the market was flooded with REO), so the prices for lender owned homes (REO and short sales) are at least 5% higher than last year.

The county assessed value is to a large extent based on the sales stats of the previous year. Assessments for 2010 will most likely be higher in these areas than assessments of 2009. Ask your real estate agent to send you stats for comparable sold properties in your subdivision. You will get some idea of where your local market is going.

And do not be surprised: you might see your home assessed value increase in 2010.

All the best,

The advice you've gotten is good here. Did you have an appraisal? That is a second, uncommissioned, opinion of the value of your home. If you got a loan, you had one. Go check your copy, or call your loan officer if you never got your copy. You would have been alerted if you were paying too much.

Hi Fairfax Home Buyer - you have received some true and accurate advice below. Please let me know if you would like for me to send you data on the market value of your home at the time you bought as well as currently. From what you have stated, I see no reason to think that you got a bad deal.

In 2008 and 2009, I have been working with many buyers and the process is extremely frustrating in the majority of situations. Some of them have been easier, but I will give you a few examples of my real experiences: one buyer I have written 13 offers for and his offer has not been accepted yet by any of the banks/regular owners; two buyers waited for five months on short sales and received a higher price at the end that they could not afford. A few of the buyers have stopped looking completely out of frustration with the extreme buyer to buyer competition.

The bottom line is that there are more buyers than desirable inventory at this time in the Northern VA market. I would be so happy if I was a buyer and I was actually able to obtain a home at all right now. Looking at historical figures, you probably got a price much lower than at the peak of the market and certainly you got an interest rate that is one of the lowest for mortgages in the past 50 years. By next year, you may see the value of your home increase above what you bought it for and the interest rate will increase as soon as the government stops artificially keeping it low to stimulate the economy.

Unless if you have some urgent need to sell your house, you are very fortunate. Congratulations on becoming a home owner and not throwing away money on rent anymore! Enjoy your house and make it your own!

Thanks,
Sonal
703-863-0031

Don has given you an excellant answer and the FF Cnty web site is also a good suggestion. The assessed value can't be counted on to be an accurate selling or purchase number. The appraisal is much more reliable and in then last 2 years they, appraisers, have had rules tightened so as not to over appraise property.

Sounds like buyer remorse here...what is it you don't like about the house besides the price you paid which was most likely spot on??

Stan Reed, Realtor

Answer below is correct. Assessed value means very little compared to market value in the area, ie, what folks are actually paying for similar homes. The only time I even take assessed value into consideration is to possibly calculate the percentage of assessed value that closed sales are achieving. Sometimes homes are selling for much less than assessed value, and sometimes they are selling for much more.

To highlight the tax record issue: there is a particular home in the area that had a major addition done about 4 years ago. It's tax assessment is in the $600k range, but it's real market value is about $1.4m.

Regarding the appraisal; what you had happen is pretty much the rule. The bank's appraiser is out to determine whether the offer price for the home is justified given the markets activity. If it measures up they will always give it a value equal to or $500-$1,000 over the offer price and no more.

I echo the comments below regarding the CMA. If you did not have a comparable market analysis done for you as part of arriving at an offer price you could go back to her and ask for one now, or seek and independent opinion from another agent.

Your agent was telling you the truth. A home's assessed value has almost nothing to do with its true value. Check Fairfax County's website. It says: "Given the size, complexity and diversity of properties within Fairfax County, fair market value is deemed to be reasonably estimated if assessments at the neighborhood level generally average in the low 90's percent range when compared to sales prices. If the relationship between assessments and sales prices for a given neighborhood falls below this range, assessments normally need to be raised. If the assessment-to-sales ratio is above this range, assessments may need to be lowered." See http://www.fairfaxcounty.gov/dta/realestatetax_asr.htm

So, what that means is that if a house is assessed at $500,000, then Fairfax County deems the assessment to be accurate if the house is actually worth anywhere from $450,000 to $550,000. In your case, if you paid $20,000 more than the assessed value, so long as you didn't pay under $200,000 (with an assessment of $180,000), then the County considers the assessment accurate. And even if you did pay less, it still doesn't mean the assessment was accurate.

Really. Trust me. Tax assessments are not at all useful in determining what your home is worth.

As for the appraisal. Don't worry about that, either. Even when the market was hot, it wasn't unusual for appraisals to come in right at the contract price. That's happened to me every time I've bought a home. Amazingly, the appraisal is precisely the same as the contract price. It's just the way it's done. Where you have to worry is if the appraisal comes in under the contract price. But that wasn't the case, there, either. And in today's market, appraisers are very, very cautious. There are plenty of cases in which the appraiser's figure is substantially under the true value of the home. The fact that yours came in a few dollars higher than the purchase price is a pretty solid indication that you got at least a fair value, and maybe a very good one.

The only sure way to figure out whether you got a good deal, an OK deal, or got ripped off is to look at the comps. What have other similar homes sold for--in your neighborhood, generally within 180 days of the sale of your home? Did your agent prepare a CMA for you? It's almost always done if you're the seller. It often is done if you're the buyer. If she did, take a look at the CMA and see if the houses on it are comparable, and what they sold for.

Hope that helps.