Question about assessments (Virginia Beach, Chesapeake: for sale, real estate, mortgages)

[SawMill]

If your city assessment value of your house goes up say, 20k, does that mean your house is worth 20k more?

We were looking to buy a FSBO that the owners lived in for a year (military transfer). We looked it up and they were selling it for almost 40k more than what they just paid for it. And they made no upgrades, other than repainting. When we questioned their price, they cited the increase in city assessment as their reasoning for increasing the price.

I dont think thats right. Am I wrong?

[sheldonteam]

Do not use the city assesment to determine the price. It should be based on comparibles in that neighborhood. A lot of home are currently selling for less than assessed value and in many instances selling for less than the current owner paid for it. You should have a realtor do a cma on the property , but a worse case senario would be that your lender would have an appraisal done and that would verify the price, but you wouldnt want to go thru the time and expense if the property is not going to appraise. It cost you nothing to have a professional help you.

[citydweller]

There are quite a few sites for comparables that may be of some help: cyberhomes.com, yahoo real estate and realtor.com to name a few.

[ellar]

A 40k increase in one year in today's housing market--that's just crazy! I've found most FSBO houses are way overpriced. There is a house for sale behind us right now that originally was FSBO. They priced their house about 75k more than anything comparable in the neighborhood. Needless to say, it did not sell, and they've called a realtor. Don't fall for the FSBO tactics. Our house assessment actually just went down in Chesapeake. I don't know about the other areas.

[Mark Sr.]

I agree, most FSBOs are over priced. Tax assesments in Virginia Beach lagged behind market values for years. When I first got my RE license in '95, Virginia Beach home values typically ran 10-20% higher than assessments. In the late '90s assesments started to become sort of irrelevant in relation to values. Especially as home values started to go up faster and many homes were being remodeled or greatly improved.

After a few recent years of skyrocketing assesments, they are more in line with home values. However, I am seeing a quite a few listings that are priced under city assessed value.

-Mark

[pbmulligan]

OK- this is how most people price their homes:

• they take what they owe on the home (first, second, third mortgages and any equity lines of credit)
• Add: balance of credit cards, car loans and any other consumer debt they want to pay off
• Add: a "profit"

As for tax assessments: throw them out the window. I have seen some way over market value, some way below market value. It does not differ by city, either- we see variations WITHIN cities. Tax assessments ARE NOT market value. As for appraisals, they are good, but cost $ upfront and guarenteed: you can hire 3 and three different valuations. Market value is this: what buyers are willing to pay for the home right now.

FBSO's prices tend to be skewed if they have not had a real estate professional talk some sense into them. Houses in the MLS might be priced this way too, if the seller has a bad agent. That is why you see homes sitting on the market longer than the average market time.

Truly, the only way to sell a home in this market is correct pricing. Real estate agents are trained in valuation-- that is their expertise. For sellers: get 3 agents who know the nieghborhood to give you a market analysis- it FREE!

Buyer's without representation: BEWARE!! You are legally entitled to representation. Why not take advantage of what is available to you? This is the biggest purchase of your life. A mistake can costs you $thousands$ now and even more thousands $ later (through physical defects, overpaying, investment in the wrong neighborhood, etc....)