Relationship between Tax Assessments and Sales Price/Bank Appraisals (Reston: comparable sales, for sale by owner)

[novahousehunter]

I understand that the tax assessments and bank appraisals are different numbers, and that in general the banks are more accurate because they are more specific to the house, less reliant on general formulas, but am curious how closely they track.

I am negotiating on a house where the seller (not a bank, a real person in this case) wants about 25% more than the house's 2009 tax assessment. Other issues aside, I'm curious how often the bank will assess a house that much higher than the county tax assessment. In other words, even if I were willing to pay that, what is the likelihood the deal would make it through the bank appraisal?

Anyone have experience?

Thanks!

[Margery]

If you are negotiating with a for sale by owner and are seriously interested in the house, for heaven's sake pay for an appraisal up front or make your offer contingent on the house appraising at sales price. You didn't say where the house is located but it would be very rare in the Northern Virginia market to have an appraisal come in higher than the tax assessed value. I am seeing some sales slightly above (but not 25%), most sale prices are below assessed value, some as much as $100,000 below assessed value. Why do you not have a real estate agent representing you?

[novahousehunter]

Originally Posted by Margery

If you are negotiating with a for sale by owner and are seriously interested in the house, for heaven's sake pay for an appraisal up front or make your offer contingent on the house appraising at sales price. You didn't say where the house is located but it would be very rare in the Northern Virginia market to have an appraisal come in higher than the tax assessed value. I am seeing some sales slightly above (but not 25%), most sale prices are below assessed value, some as much as $100,000 below assessed value. Why do you not have a real estate agent representing you?

Thank you.
I probably shouldn't be too specific on a public site, but the house is in PW, I do have an agent, and the offer was contingent on the assessment (I wasn't aware you could also do an assessment up front--that might have made more sense).
The house was priced way above assessment, I offered a little over assessment (but still a lowball vs. the asking price, I guess), they countered pretty high. My agent thinks I should pay it, I'm just trying to figure out if the deal is dead already anyway.

[oneasterisk]

Has your realtor done a CMA of the house? How did the comps stack up with the asking price?

[tgbwc]

I am hoping they appraise a little higher. We just accepted a contract offer that was $6k higher than the PW County assessment. I don't know what they use as a baseline, but hopefully the appraiser takes into account the new shed, 2 year old a/c, year old granite and stainless steel appliances, newer fence, screened in deck, etc.

[tgbwc]

Originally Posted by novahousehunter

Thank you.
I probably shouldn't be too specific on a public site, but the house is in PW, I do have an agent, and the offer was contingent on the assessment (I wasn't aware you could also do an assessment up front--that might have made more sense).
The house was priced way above assessment, I offered a little over assessment (but still a lowball vs. the asking price, I guess), they countered pretty high. My agent thinks I should pay it, I'm just trying to figure out if the deal is dead already anyway.

I'll let you know how ours turns out. Our house County assessed at $289,100. The contract is for $295k. There have really been no comparable sales in our neighborhood in the last year. There was one in November for $325k and a recent foreclosure sale at $242k. The foreclosure was the same model minus a walkout basement, deck, and any upgrades inside. We'll see....

[novahousehunter]

^ Thank you!
We did not find many things that could be considered "comps" that sold.

[lchoro]

Search the assessments database of the county or city to find some comparable sales. Look up the property you're interested in and use the recent sales or sales search function to list the sales.

[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.

[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.