Relationship between Tax Assessments and Sales Price/Bank Appraisals (Oakton: 2010, rent)

[spidercharm]

Originally Posted by Denton56

I can tell you about a house on my street in Vienna. It went on the market in August, 2008, for $689,000. The tax assessment was $539,000. It was an unrenovated home built in 1972, with original bathrooms and kitchen. They got a full price contract in a week. I don't know what the appraisal was, but the agent said it was "really, really, good". The sale went through without a hitch.

A second house sold in the neighborhood last summer. Their tax assessment was $536,000. They listed the house for $675,000. It sold in 11 days for $667,000. Again, no problem with appraisal, went through in a month without a problem.

In February another house on my street was listed for $729,000. Their tax assessment is currently $542,000, last year it was $553,000. They are under contract. The agent won't say exactly what the offer is, but she has said it was over $700,000 and very close to the asking price. Their settlement is in a few weeks, so I have to assume that the appraisal is not an problem.

Perhaps my part of Vienna is unique, but tax assessments don't seem to mean much where I live, everything sells for well over the assessment.

Are you selling your home?

Don't take any offense...but you seem to be talking about year 2005 and we are in 2009. Can you post the address for the records?

Home that you said was sold at 160k above the assessment must have goldmine under. Again, I am sorry to say it but it seems impossible to me.

[lindy112]

We bought our house in W. Springfield last spring for $33K over tax assessment. No problem with appraisal.

[claremarie]

When we lived in McLean, our annual tax assessment was ALWAYS less than what we presumed to be the fair market value of the property -- that was one reason we were never able to protest any of them. The most recent assessment was received about a month before we sold the house last summer, and was more than $100K below the contract price.

[JEB77]

Spidercharm - I am familiar with some of the properties that Denton mentions in Vienna, as well as other properties in McLean that have gone under contract at prices much, much higher than the latest tax assessment. What she says is absolutely correct. I'm not sure why, if you live in Vienna and can see first-hand that Vienna and its neighbors don't have the same glut of bank-owned or foreclosed-upon properties as other communities in NoVa, that surprises you so much.

However, based on Redfin information, at least some of these transactions are contingent/no kick-out deals, which means the buyers can get out of the contract if, for example, they can't sell their current house or can't obtain financing because an appraisal comes in too low. I doubt that sellers would have agreed to all those contingencies a few years ago.

[Denton56]

Originally Posted by spidercharm

Are you selling your home?

Don't take any offense...but you seem to be talking about year 2005 and we are in 2009. Can you post the address for the records?

Home that you said was sold at 160k above the assessment must have goldmine under. Again, I am sorry to say it but it seems impossible to me.

Sure, no problem. The first house I told you about, that sold last summer, the one with no renovations, sold in a week:
606 Kearney Court, SW,
Vienna

Second house, some updates, sold in 11 days:
1009 Rachel Court, SW
Vienna

The third house, now under contract after 41 days on the market for something over $700,000:
613 Kearney Ct, SW
Vienna

Check out the recent sales prices of these houses and their tax assessments here, at the county website:
Fairfax County

The third house, 613 Kearney Court, hasn't gone to settlement yet, but you can see here that it is under contract, with a listing price of 131% of assessment:
FX6976045 on FranklyMLS.com 613 KEARNEY CT SW, VIENNA VA for $725,000 in PICKETT ESTATES Home For Sale

I am fairly certain that those are the only homes that have sold in the neighborhood, Pickett estates, in the last year.

Is it just my neighborhood? I'll need to look at the rest of Vienna to determine that, unless someone here knows the answer.

[Denton56]

JEB,
A no kickout deal means that there is no kickout clause, the buyer cannot be kicked out, almost always it is contingent only on a home inspection and not on selling another home. If that was the contiguency, selling another home, it would be a contract WITH a kickout clause, not with no kickout.

The homes in my neighborhood have not gone under contract with a contingency for anything other than inspection. All close within a couple of months, at the very most. I have no clue why we are such an outlier. We are within a mile to metro and rt 66, but so are many other neighborhoods. Also all of these homes are split levels which usually appraise for less because one (or more) levels don't count in the county's square footage. But there are many, many, split levels in Fairfax county. So I can't explain our very low assessments compared to appraisals and sale prices.

[Samara11]

Originally Posted by Denton56

So I can't explain our very low assessments compared to appraisals and sale prices.

The forces of supply and demand determine the sales price

[JEB77]

Originally Posted by Denton56

JEB,
A no kickout deal means that there is no kickout clause, the buyer cannot be kicked out, almost always it is contingent only on a home inspection and not on selling another home. If that was the contiguency, selling another home, it would be a contract WITH a kickout clause, not with no kickout.

That's what I would have understood in the past, but I had the impression that some sellers are currently allowing the buyers to condition their "contingent no kickout" offers on the sale of their current homes, as well as the results of a home inspection, obtaining bank financing, etc. But you're obviously closer to the recent sales in SW Vienna, so I'll take your word as to the terms of those transactions.

[tgbwc]

Originally Posted by Denton56

Forgot to add, my friend in Reston is refinancing. Her tax assessment is $462,000 for 2009. Her appraisal came in at $605,000.

So, I wouldn't worry too much about tax assessments and appraisals.

I hope you are right. They did our appraisal last Friday, so we are waiting to hear how it goes. We need $6k over the county assessment that we got in the mail yesterday. The problem (why we don't know what to expect) is there are only a couple of comps and they sold last April, July or in the fall. One foreclosure sold last month. It is tough to wait as this is the last piece of the puzzle.

[tgbwc]

Originally Posted by Denton56

The third house, 613 Kearney Court, hasn't gone to settlement yet, but you can see here that it is under contract, with a listing price of 131% of assessment:
FX6976045 on FranklyMLS.com 613 KEARNEY CT SW, VIENNA VA for $725,000 in PICKETT ESTATES Home For Sale

I am fairly certain that those are the only homes that have sold in the neighborhood, Pickett estates, in the last year.

Is it just my neighborhood? I'll need to look at the rest of Vienna to determine that, unless someone here knows the answer.

And that third house shows the '08 assessment. The '09 isn't much lower, but it is lower.