They wanted $199,500 for this property. The city assessment is $187,400. Are they crazy!? In this economy?

Asked by Cands1022, Hampton, VA Fri Aug 5, 2011

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This question is about this property: http://www.trulia.com/property/3046116632-9-Colgate-Cir-Hamp…

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Joe McAvoy, Agent, Newport News, VA
Fri Aug 5, 2011
Cands1022,

Your comment raises very good point about a widespread misunderstanding by many in the general public about what a city assessment is and what it is not.

A city assessment is not a real estate appraisal. A real estate appraisal is an expert's opinion of a property's estimated value. The estimation is based on very detailed and comprehensive research and documentation established by decades of increasingly stringent trade and industry guidelines. Appraisals include an interior inspection for identification of interior features, improvements, and the overall condition of the home.

A city's assessment efforts is an attempt at estimating the fair-market value of perhaps tens or hundreds of thousands of properties by a relatively small number of government-employed tax assessors. An entire neighborhood may be re-assessed each year in an hour or two, when a typical appraisal on a single home may take an appraiser 6-10 hours. Assessors do not perform interior inspections on their routine assessment work and may not even do a curbside look at the property.

I've closed several homes this year that sold for tens of thousands more than the city-assessed value. My own home is under-assessed by $10,000 or $20,000 dollars by my estimate. Alternatively, some homes are priced tens of thousands of dollars under the assessed value and not necessarily because the owners are in a pinch, but because that is the price at which the owner and agent has determined the home is best marketed to attract a buyer. The city assessment has little or no bearing on the pricing decision.

So, a good way to think of assessments is a figure by which the city or county determines the amount of taxes you will pay it each time real-estate taxes are due, or the price at which the city or county would likely compensate you if it chose to condemn your home through eminent domain.

I work hard to find my home buyers the home they want for the best price possible. Feel free to contact me any time with real estate questions or service requests. I am easy to reach and quick to respond.

All the best,

Joe McAvoy
Virginia Commonwealth Realty
Direct: 757-316-8974
0 votes
AJ Heidmann, Agent, Arlington, VA
Fri Aug 5, 2011
Cands1022,

I can't speak to the value of this specific home because it is outside my service area, but I wanted to speak about the city assessment you mentioned. That figure is solely a creation that allows the muncipality to fund the annual budget for services and doesn't reflect the individual value of the home. Most homes in the area with a similar square footage and Bed/Bath configuration will have a very similar assessment. That assessment won't take into account interior upgrades that didn't require a permit like hardwood floors, replacement windows, new HVAC or hot water heater. Additionally, the specific location of the home doesn't get much consideration by the city number; this home appears to be located on a cul-de-sac which most people are willing to pay more for versus the same home on a busy street.

To wrap this up, you really need to take the price in the context of current active competition on the market and comparable solds homes in the area in the past 90 days. Look at individual upgrades, locations, schools, etc and should tell you if they are crazy. I recommend contacting a local Realtor to help you make this analysis.

Best of luck!

AJ Heidmann
AJ@AJHeidmann.com
McEnearney Associates, Inc.
Licensed in Virginia
Web Reference:  http://www.AJHeidmann.com
0 votes
Dave Griswol…, Agent, Bridgewater, NJ
Fri Aug 5, 2011
Hi Cands, it could be they are or it could be they owe that much on their mortgage, could be a short sale with the price reflecting what is owed.

No one knows unless you contact the Realtor if your interested in the property.

All the Best
Dave & Lisa
Web Reference:  http://www.urhomerealty.net
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