Home Buying in Wilmington>Question Details

Campbellacco…, Home Buyer in Wilmington, NC

How to use assessed value as a guide?

Asked by Campbellaccounts, Wilmington, NC Wed Apr 28, 2010

Interested in buying a house in Landfall, Wilmington, NC -- how is the assessed value related to the "real" value

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9
You can't.

Period.

And even the tax assessor's office tell you that. Where I live, in Fairfax County, Virginia, the county says that it considers a tax assessment accurate if it's within the "low 90s" of percentile accuracy. So an assessment of $500,000 is considered accurate if the home's actual value is between about $410,000 and $590,000. And keep in mind that lots of assessments are not accurate. Or they might have been within that 90%-110% range when done, but values have changed. A while back, I did a small study of assessments versus sales prices and found that, according to county guidelines, about 70% of the assessments were accurate. About 30% were off by more than 10%.

As for where you live--New Hanover County--I didn't find anything on its web site with a similar figure. But here's what I did find:
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Real Property

Every 8 years, the New Hanover County Tax Department completes a reappraisal of all real property in the county. This process is called "Revaluation" or the short term is "Reval". The purpose of a reval is to comply with North Carolina General Statutes which require property to be valued, or appraised, at its current market value at least every eight years and to insure all taxpayers are taxed fairly and equitably. Values are placed on real property using either one or a combination of the following appraisal approaches:

The sales comparison or market approach. This approach compares the selling prices of similar properties and places a value on those properties based on actual selling prices close to the date of the last revaluation. This approach is the most accurate when there are a number of sales occurring and must have occurred at the time of or before revaluation.

Cost approach. Values are determined on what it would cost to replace a similar property at current building costs minus depreciation based on a variety of factors and the age of the property. This approach is best used for unique properties or newer construction.

Income approach. This approach is used primarily on income producing properties such as apartment buildings or business offices. Revenues are analyzed to determine a net operating income. This income is then capitalized to determine a value for the property.

Revaluation - What Is It And Why Have It?

Revaluation is a systematic, in depth process using a Computer Aided Mass Appraisal (CAMA) system to reappraise or reassess all real property in the county to the current market value. (Appraised value and assessed value can be used interchangeably in North Carolina because property is required to be assessed at 100% of its appraised value.) The real estate market is one of constant change caused by the freedom we have to buy and sell property. This change can vary greatly depending on a property's size, type and location. This can create an inequitable situation in the level of assessment among owners of property and inequity among differing types of property.

The longer this situation exists, the more unjust it becomes. The end result is an unfair tax burden on those properties which have an assessed value close to the actual market value compared to those properties whose assessed value is well below market value. The relationship between assessed, or tax value, and market value is called the sales/assessment ratio.
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See http://www.nhcgov.com/AgnAndDpt/TAXS/Pages/FAQs.aspx

Note that where you live the reevaluation is only done once every 8 years. That means that there may be plenty of properties with evaluations from before the real estate bubble burst. You might be looking at properties last evaluated/assessed in 2002! And maybe, just maybe, the assessment was correct back in 2002.

Bottom line: You can not use a property's assessed value to determine its fair market value. The two are not sufficiently related.

Hope that helps.
1 vote Thank Flag Link Thu Apr 29, 2010
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
Contact
To help learn the values in different sections of Landfall, you can check out a website that has split it up into 18 different sections or neighborhoods. Each neighborhood has last years sales history, site map, aerial photos, drive by photos, architecture, yard sizes, and $/square foot. If you are interested in a particular neighborhood inside Landfall, you can click on see available homes and will display only the homes in that subsection of Landfall. Just scroll down the list until you alphabetically get to Landfall or use the map and everywhere you see a dinghy on the map the neighborhood is represented.
0 votes Thank Flag Link Mon Aug 2, 2010
Hello-

Like everyone else said, you can't.

If you are still interested in the Wilmington area, I am happy to help. There are some great prices in Landfall right now!

Jill Gunter
jgunter@century21sweyer.com
910.352.6948
Web Reference: http://www.jillgunter.com
0 votes Thank Flag Link Thu May 6, 2010
As Don Tepper says, you can't; it's not.
0 votes Thank Flag Link Thu Apr 29, 2010
There are differnt values for differnt purposes. The assessed value is used to establish a taxing event which is usually established for a point in time, which is usually the first of the year and determined by computer programs to do mass evaluations. So it is difficult to compare assessed value to "real value" because you are focused on what the value is today and what the property should sell for today. Real Value is what the property sells for!

A buyers agent can assist you and look at the specific property in the market you are interested. What has sold and how it compares to the property you want to purchase. If the buyers agent is experienced they can help you understand the real value as of today. This is the best way to understand the real value.

Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee

http://www.milwaukeebailout.com
0 votes Thank Flag Link Thu Apr 29, 2010
It is awfully hard to draw any conclusions from the county's assessed value of a home. Sometimes the assessment for tax purposes can be far from what the home will get on the open market. It is best to have a real estate agent look at your home and make some comparisons to other homes or to get an appraiser to do a full appraisal.

Best,
Ron Rovtar
0 votes Thank Flag Link Wed Apr 28, 2010
Consider recent sales when trying to determine value. The tax office is often off base and you don't want to be too high or too low and lose the house to a more informed buyer.
0 votes Thank Flag Link Wed Apr 28, 2010
The assessed value is used for tax purposes. It is usually lower then the current market value, but in some cases it can be higher then the current market value.

What is more important when buying is what similar properties in the same area are selling for. The appraised value used to approve loans is based on current market value.
0 votes Thank Flag Link Wed Apr 28, 2010
The rule of assessment is plus or minus 10%.

When was the assessed value done? Prices have changes greatly over the past few years both up and down.

You could offer x% over or under the assessed value and either greatly over or under pay for the property.

There really isn't a correlation between assessed value and real value.
0 votes Thank Flag Link Wed Apr 28, 2010
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