Hi Csutula - there is a big difference between an appraisal and a tax assessment.

Getting the tax record corrected would simply mean that your property taxes would increase. The tax assessment does not represent the fair market value of your home.

The appraisal does represent the fair market value of your home and should have involved the appraiser visiting the inside of your home - should not just be based on just what the tax record says.

You can also order a second appraisal and make sure it will be an appraiser that will visit the inside of the property.

Make sure you are working with an agent that is aggressive on your behalf. The process of selling a home is a huge undertaking - the agent representing you should be someone who is meeting your expectations.

The Fairfax County Dept. of Tax Administration was extremely responsive to one of my seller's recent requests (April '09) for an on site evaluation and reassessment. On site inspection occured and records were updated to reflect basement improvements, including bedroom and bath additions, with total livable area corrections all within less than 30 days of the request. The assessment for 2009 was left unchanged and most certainly will be increased in 2010 but that will be at the buyer's expense. In that case the appraisal also came in lower than contract price but the buyer's agent and buyer were persuaded by the revised tax record (updated in MRIS) and the correct comparables that paying more was in their best interests. They still got a great deal but the seller was not at the mercy of a $350 appraisal. I recommend making the assessment corrections before listing the property so all the comparisons by appraisers and on websites (like Trulia) compare similar homes in the first place.

Here is the only thing I can see you have a shot on getting approved for with the state of the current appraisal market. Find out if the appraisal was done by an out of town appraiser. Was the appraisal done with a visit or done as a drive by/computer valuation. If it was an out of town appraiser, then you may have a chance using this clause in the HVCC rules: The preface is that a lender may not:
(9) ordering, obtaining, using, or paying for a second or subsequent appraisal or automated valuation model (AVM) in connection with a mortgage financing transaction unless: (i) there is a reasonable basis to believe that the initial appraisal was flawed or tainted and such basis is clearly and appropriately noted in the loan file, or (ii) unless such appraisal or automated valuation model is done pursuant to written, pre-established bona fide pre- or post-funding appraisal review or quality control process or underwriting guidelines, and so long as the lender adheres to a policy of selecting the most reliable appraisal, rather than the appraisal that states the highest value

You might have a chance also stating that the tax records are inaccurate to the property especially if an in-home appraisal was done incorrectly. The problem is that as a seller you are left holding the bag since the appraisal is property of the buyer and sticks with the property if the buyer walks away. I know that there are some adjustments being made to this law which was another swift but inaccurate reaction to the market place. The problem is that we are all adjusting to these new rules and there is no direction/guidance from our fearless leaders in Washington. Good luck - I would like to be kept in the loop as to what happens. The four appraisals that we have had come in low recently all adjusted their sales price.

Jimmy Mulhern