Home Buying in Kensington>Question Details

Doglover, Home Buyer in Kensington, MD

I found a great home with a huge backyard in Town of Kensington (almost an acre). It would be perfect for my dogs to run around. How do I value land?

Asked by Doglover, Kensington, MD Mon Aug 9, 2010

I have the assessed value but have been told that tax assessments are low in this area, sometimes by up to 15-20%. I haven't found any comps in that area with a yard this large. Many lots are under .25 and up to .5 acres. This is almost a full acre of usable yard. 3 Kensington realtors are saying it is a fair asking price, but it is higher than the assessment. It is also only a 3 minute walk to the MARC train and then 20 min to Union Station in DC (not sure how to value that either).

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Richard L. Sanderson’s answer
I agree with Don and Daniel, don’t get hung up on the assessed value. Think of it this way, no one would buy a stock or bond today for the value it was estimated to be on January 1, 2010, using an average or media price for the 12 months of 2009. Assessed values have only one effective date and use historic sales prices to estimate a value using computer-assisted mass-appraisal techniques that can be applied uniformly so that we all pay our fair share of real estate taxes according to the estimated value of our properties. They are not THE market value, even on the effective date, but the estimated market value.

As Don and Daniel also point out, the extra lot size may not be as valuable to the average buyer. You just happen to be a dog lover so it has a value to you. A real estate appraiser (and assessors too) looks at the subject property and comparable sales and other market indicators from the perspective of the “typical buyer, typical owner, and typical seller.” Would the typical buyer of a home in the Town of Kensington consider a lot with one acre of land superior to .25 or .50 acres? And if so, how much more would they pay? The clearest answer to this question will be revealed by comparable sales where you could match up similar properties where the only significant difference was lot size and determine how much more the property sold for with the larger lot. Unfortunately the available sales may not allow for this type of comparison. Appraisers also consider the use of the property. While a one acre lot is certainly physically larger than a .25 or .50 acre lot it can probably only have one house built on that sized parcel (zoning and land use regulations are also checked by the appraiser). To the typically buyer, the greatest value of a residentially-zoned lot is the fact that a home and certain accessory buildings (detached garage, shed, etc.) can be built on it. The additional land after the minimum required by the zoning restrictions has value, but not as much as the primary lot area.
0 votes Thank Flag Link Wed Aug 11, 2010
The tax assessment is not necessarily related to the market value. Unless the property is sub dividable, the fact that it is bigger than other lots does not add a lot to value. For some buyers, this could be a huge problem if they have to care for a larger lot than they need in which case would have a negative effect on value.
0 votes Thank Flag Link Sat Dec 28, 2013
View market trends for Kensington, MD
0 votes Thank Flag Link Thu Feb 7, 2013
You can obtain a copy of a HouseFax report for this specific property and take a look at the valuation information. The report will not only answer your question but provide you with inside information about the property, demographics, crimes, schools and environmental risk information.
0 votes Thank Flag Link Mon Aug 9, 2010
Lots with a good amount of land in the Kensington area are hard to find as you are noticing, there are only 4 active listings that have over a half of an acre...unfortunately there is no rule of thumb for valuing the land for its resale value. As mentioned assessed values can be thrown out the window, true indicators are recent local comps and appraisals. I would be happy to sit down with you and give you my opinion as well, for free, so that you can come to a final conclusion on the homes worth. In all honesty perks like this are only of value to those who, like yourself, perceive them as valuable. While a large yard could be a hassle to one it could be a paradise for another who has pets, same goes for swimming pools, etc... I would say that at this point (if the home and location are desirable) then the extra land's value is in the eye of the beholder. I recommend you make a solid offer that is in your best interest, there still may be some wiggle room for negotiations...again I'd be happy to give you a 4th opinion if necessary.
Hope this lack of an answer has helped you.
0 votes Thank Flag Link Mon Aug 9, 2010
First, forget the assessment. Assessments don't matter.

You're right that it's not easy coming up with good comps. I found the house you're considering and looked at comps within about a 1.1 mile radius--out to Viers Mill Road and down to the Beltway. And there were a few on larger lots. The difficulty is that many of the other recent sales are somewhat more modern ramblers or substantially newer colonials.

I'm not licensed in Maryland and while I know Kensington, I'm no expert there. But what I saw on MRIS tended to be in line with what those three Kensington Realtors told you.

In addition something that's only a 3-minute walk to a commuter line raises its value substantially. Properties within, say, a quarter mile of the VRE (in Virginia, where I can speak with some confidence) are worth distinctly more than the same properties a mile or two farther away. And that's the same with being close to Metro. Or a quick drive to get on the Beltway.

The extra land counts for something, but not a huge amount. For example, a house on 0.75 acres of land wouldn't be worth 50% more than a house on 0.50 acres of land. And even if you were to consider the assessment (which you shouldn't), in your case the land and the improvements (the house) are valued about equally.

If you don't have a Realtor representing you (I'm not sure about the standing of those 3 you spoke to), you should.

But, as I said: assessments don't matter. Location does matter. Amount of land matters somewhat, though really more to you (because of your dogs) than to someone who'd be just as happy on a third of an acre.

Recognize, too, that if you're having a challenge coming up with a "fair" price, the seller and his agent probably went through a similar exercise. So it's possible their number isn't as "solid" as if they were selling a cookie-cutter home in a large community. That means there may be more negotiating room for you.

So select a Realtor, if you haven't already, and have him/her do the best he/she can on comps. Then go from there.

Hope that helps.
0 votes Thank Flag Link Mon Aug 9, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
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