Meeting With Supervisor Yields Answers– Sort of.
February 6, 2007 | 1 Comment
I mentioned earlier that I was having a sit-down with Charles Allbaugh. Allbaugh is a Rivanna District representative on the Fluvanna County Board of Supervisors. I wanted to meet with him in order to get some type of feel for how the administration in the county is reacting to the recent assessments, and what, if anything, is planned for the future.
I met with Allbaugh last night for about a half-hour. He was very open to discussing the issue, and seemed very willing to help however he can. After having the meeting, however, it became very obvious that there is little he, or anyone else in county government can do at this point.
In case you haven’t been following along, allow me to briefly recap the situation– Fluvanna County conducted a real estate reassessment during 2006. The new assessments were mailed to property owners in January. To the dismay of many, assessments increase and average of 49%. In case you are wondering, Fluvanna’s last assessment was conducted two years ago. Since the assessments have been received, many homeowners have been scheduling appointments to challenge their assessment, with varying degrees of success. As a result of the assessment, Fluvanna has announced that the revenue neutral tax rate for the county is $.40/$100 (the current rate is $.59/$100). Essentially, after the county has conducted its budget meetings and settled on a tax rate, any rate higher than the 40 cents would be considered a tax increase.
My meeting with Allbaugh made one thing very clear: the assessment is over. Nothing will be done to change the assessments on a county-wide basis. At this point, only individuals will be able to challenge their assessments. Individuals will have an opportunity to have their assessment reviewed by the Board of Equalization if they think it is incorrect. At this point, the only concession that is being made is to waterfront property owners at Lake Monticello. It appears that Blue Ridge Appraisals (the company contracted to do the assessment) is going to review the value given to waterfront land and adjust it downward. Despite any amount of evidence that supports the opinion that the assessments are too high (more on that later), the county is legally prohibited from having the assessments lowered “en masse.” It is up to each individual citizen to challenge his or her assessment.
At this point, the county seems to be treating the assessment like spilled milk. Unfortunately, or fortunately for Supervisors, we are heading into budget season. This means that the adminstration’s time is going to be taken up by budget meetings and discussions. Typically, this is their busiest time of the year. This may serve to effectively quash any discussion of the accuracy of the assessment as people turn their focus to other things. If you thought the public fervor was strong regarding the assessment, wait until the board starts is discussion on the tax rate.
On that note, if you have any concerns or comments on the assessment, the next Board Of Supervisors meeting is Wednesday, February 7th at 2:00pm and 7:00pm at the Board of Supervisors room in Palmyra. There will be time for public comments at each meeting, so this is a great opportunity to make yourself heard.
[tags] real estate, realtor, fluvanna, assessment, taxes [/tags]
Finding Answers in Fluvanna
January 27, 2007 | 2 Comments
In response to the many calls, emails, and comments I have received from people regarding the assessments in Fluvanna County, I have tried to get answers. To that end, I have scheduled a meeting with Rivanna District Supervisor Charles Allbaugh. While he acknowledges that he is on the Board of Supervisors, and not from the Commissioner of Revenue’s office, and this is his first assessment as a Supervisor, he has agreed to try and answer any questions that I have the best that he can. I have no reason to think otherwise, and Charles has been one of the more forthcoming Supervisors on the issue that I have found.
Since I have this meeting scheduled for next Thursday, I thought that if any of you out there have any questions about the assessments that you would like answered, I am happy to ask them. Of course, I am not going to ask him any questions about specific properties, so keep things general. I will ask him as many questions as I can, or as many as he is willing to answer, whichever comes first.
So if you do have unanswered questions, now is your chance. Feel free to either leave them here as comments or send me an email.
[tags] real estate, realtor, fluvanna, assessment, taxes [/tags]
The Market Determines Price, Not the Government
January 25, 2007 | 1 Comment
I have observed a rather disturbing sentiment surfacing as a result of the Fluvanna County assessment controversy. I have heard a number of people say things like, “Well now I am going to sell, because my the county says my house is worth ‘X,’” or, sellers who say, “now I don’t have to negotiate the price, because the county says my house is worth more than the list price.” Both of these statements are dangerous, and exhibit a fundamental misunderstanding of how markets, and especially real estate markets, work.
I am going to say this once, very emphatically, so that hopefully I will only have to say it once: THE MARKET DETERMINES PRICE, NOT THE GOVERNMENT.
The reason that a home is worth some amount of money, any amount of money for that matter, is because that is the amount of money that someone else is willing to pay for it. This is the way free markets work. The value of a commodity, in this case a home, is determined by supply and demand and a buyer’s willingness to pay.
The purpose of any government assessment of property is to determine market value of the property so that the government can collect the maximum amount of tax revenue. The government IS NOT SETTING THE VALUE. In fact, the government is incapable of setting the value of any property, unless it is the government who is buying it. Even then, the person holding the property may not want to pay the government’s price. Of course, the one exception to this may be eminent domain, but that is a discussion for another day.
What people must remember is that just because the government says a home is worth “X” does not make it so. The only person that can make it so is a buyer for the property. Consider this– if you opened your assessment, and it said that your home is worth $1,000,000,000,000 (1 trillion dollars), would you believe it? Of course not. Conversely, if you opened the assessment, and it said that your home is worth $.01, would you believe it? Of course not. Just because the number that is on your assessment is palatable to you doesn’t make it accurate.
The only way to determine the value of a home is to put it on the open market. Only then will you know what buyers are willing to pay for it. Sure, a REALTOR can give you a CMA, or a licensed appraiser can give you an appraised value, but those are simply educated guesses based on the recent history of similar homes. While both should yield a number very close to market value, they may not. In selling your home, you may find out that it is worth more than you thought, or you may found out it is worth less. Either way, the government isn’t going to be able to tell you anything. The market will speak for itself.
[tags] real estate, realtor, virginia, fluvanna, assessment, taxes, free market [/tags]
Lots of Goings On In Fluvanna
January 24, 2007 | Leave a Comment
Alright, let me start by admitting that I am out of the office this week. Not to fear, however, since my phone is still ringing, and my inbox is still filling with emails from people about their assessments. I have also noticed that there have been a number of comments left on the blog, which I appreciate. There have been so many that I am going to try and address them with posts rather than simply responding to the comments.
First, let me begin by saying this. If you are concerned, or even mad, about your real estate assessment, you are not alone. In fact, there are literally thousands of people who feel the same way you do. If you are going to try and challenge the assessment, go ahead and call the county to do so. I know that some people have already received appointments with county officials to discuss the assessments. The first of my clients to do so is going to let me know how it goes on Wednesday. As soon as I know something more, I will let you know.
If you have more questions than you do answers, you also are not alone. The shock at the increase has left many people with questions, and not as many people with answers. That is why I am trying my best to get as many answers from as many people as I can, and post them here.
The more I learn, the more I will pass along to you. Since this is just the beginning of what I imagine with be a long and arduous process to sort out the county’s budget and tax rate, hang in there.
[tags]real estate, realtor, virginia, fluvanna, taxes [/tags]
The Tip of the Iceberg
January 19, 2007 | 2 Comments
The Fluvanna reassessments are out, and I can’t imagine that this is a fun week for the folks over at the Fluvanna County Commissioner of Revenue’s office. I talked about this twice before, and now that the time is here, our phones at the office has been ringing and I have been getting emails from clients past and present about the assessment. The most common question I am hearing from homeowners is, “can I really sell my house for that much?” The simple answer is, “probably not.” In just taking a quick glance at the December sales in Fluvanna and comparing them to the new assessments, it looks like about 95% of them sold for below their assessed value (in some cases, well below). More on that in upcoming posts. . .
I recognize that current residents and homeowners probably won’t experience a major increase, if any at all, in their tax bills. The county is going to have to hold a public hearing and publicize the “revenue-neutral” tax rate. That means that the rate will probably decrease enough to offset any increase in assessments. The problem is not necessarily for the current homeowners, but for the new buyers of a home. It could go something like this, “thanks for buying a home in beautiful Fluvanna County; if you don’t mind, you are going to pay taxes on an assessment that might be 20% above what you actually just paid for your home. Thanks again.” That is not cool at all.
So far, there are lots of questions, and not nearly enough answers. Many residents are shocked and upset, and I am sure that the first public meeting on the issue will be a lively one. Unanswered questions usually make people uneasy, so the faster county officials can address the issue, the better off everyone will be. I will do my best to find out what information I can and pass it along here.
Right now, we are just looking at the tip of the iceberg as far as the assessment issue is concerned. I think that most people, myself included, just want to make sure that the ship we are sailing doesn’t say “Titanic” on the stern.
[tags] real estate, realtor, virginia, fluvanna, taxes, assessement [/tags]
Let the Fun Begin. . .
January 18, 2007 | 2 Comments
Fluvanna County residents are receiving their reassessments in the mail this week. I have already heard from some residents who were shocked and now concerned. I have done a little looking at some of the numbers compared to recent sales. After just a look at the most recent county sales in December, some interesting trends are emerging. More on this tomorrow. . .
[tags] real estate, realtor, virginia, fluvanna, taxes, reassessment [/tags]
Virginia Is For Lovers– And People Who Like to Keep Their Hard-Earned Cash
January 16, 2007 | Leave a Comment
A client of mine pointed out this CNNMoney.com list of the most tax-friendly states. He currently resides in New York, but recently bought a home here in the Charlottesville area that he hopes to move to permanently very soon. New York was the second LEAST tax-friendly state when it comes to tax burden as a percentage of income. Conversely, Virginia is one of the top-ten most tax-friendly states.
One consideration that people make when they move is how that move will affect their wallet. Taxes are a major consideration. It is good to know that Virginia is a leader in keeping the tax burden on its citizens as low as possible. Citizens earn the money, and citizens should be able to keep as much of it as possible.
That includes you, Steve. Hopefully, you will be able to enjoy the fruits of you labor even more in the Old Dominion.
[tags] real estate, realtor, charlottesville, virginia, taxes [/tags]
Fluvanna Reassessment Still Looks Bleak
November 21, 2006 | 8 Comments
NBC 29 ran a story on Friday that covered the property reassessment in Fluvanna County. According to the story, the county is preparing residents for an average 40% increase in property assessments for 2007. That’s a 40% tax increase.
About a month ago, I covered this in a post I wrote that attempted to show that increasing property assessments by even 30% would mean that the assessments would now be higher than market value. In light of the fact that with this latest story, Fluvanna seems to be preparing residents for a 40% average increase, I wanted to see how the data would shake out.
I went into the MLS and looked up every property that sold in the month of October in Fluvanna County. I then looked at the current tax assessment for each of those properties, increased the assessment by 40% and compared it to the actual sales price to see if a 40% increase is in line with market value. Here’s what I found:
There were 35 properties that closed in the month of October, 2006. Of those 35 properties, I threw out three of them. One was thrown out because it was completely renovated both inside and out prior to its sale, and the other two were thrown out because they were so new that the assessment only reflected the land value. That left 32 property sales to look at.
Of the 32 sales that I examined, only 6 sold for a value AT OR ABOVE a 40% increase in their current assessments. That means that 80% of the properties sold for BELOW a 40% increase in their current assessments. What does this mean? It means that if the 40% increase in assessments were to go into effect today, 80% of the homes sold in October would be over-taxed. Not good.
My first concern is with the over-taxation. No population at any time, for any reason, should be over-taxed. This is especially true in the case of over-valued assessments, since assessments are something that can be changed. If someone wants to have a debate over the actual tax rate being to high, that’s fine. There is no reason, however, that assessments should be too high. I fully understand that tax-payers have the right to challenge their assessments, but judging by what some people have told me about their previous experiences with challenges, I don’t have a lot of hope that people will have success.
My second concern is that people will attempt to use the tax assessments to value their homes when they want to sell. The government does not set the value of a home, the market does. Tax assessments are supposed to be a reflection of the market, not the other way around. Judging by the little bit of data that I have looked at, most property assessments are going to be above the current market value unless the county experiences tremendous appreciation between now and the time the tax bills go out. I don’t foresee that happening.
The reassessment in Fluvanna County as it is currently being discussed, or not being discussed as the case may be, has the potential to be very bad for residents. At the very least, this is an issue that needs to be addressed and discussed much more at the Board of Supervisors level, and residents should be asking a lot more questions about just how much impact this reassessment is going to have on not only their tax bills, but the financial health of the county as a whole.
I am going to take some time to break down the stats that I gathered a little more, and I will continue to follow the coverage of the issue and try to get some answers from county officials.
[tags] real estate, realtor, fluvanna, virginia, reassessment, tax, property value [/tags]
Citizens of Fluvanna– BEWARE!
October 16, 2006 | 8 Comments
Those that know me will surely tell you that I am no doomsayer. Actaully, many people would call me an optimist almost to a fault (if that is possible). Sometimes, however, I cannot help but think that things have the possibility of becoming very, very, bad indeed.
In the latest issue of the Fluvanna Review, I came across their regular review of the most recent meeting of the Flvuanna County Board of Supervisors. Most of the stuff was pretty mundane, as usual. There was one little section, however, that certainly caught my attention. It read:
Supervisors were briefed on the progress of the latest countywide real estate reassessment.
According to Blue Ridge Assessments, the work is approximately half done–Lake Monticello has been completed. All fieldwork is scheduled to be finished by December 1, although a request to the court for a deadline extension will be needed to complete the documentation.
If the entire reassessment process is completed by February 1, then real estate property owners should see the reassessment reflected in their July 1 tax bills. While the company did not make a firm projection as to the probable size of the reassessment increase, a spokesperson said that it was likely to be in the 30 to 50 percent range.
Let’s keep in mind that the latest reassessment in Fluvanna County was sent to property owners in the beginning of 2004. I would imagine that even those who do not follow the real estate market are able to reason that a 30%-50% value appreciation over that time seems unlikely.
After reading the article, and putting my eyes back in my head, I decided to crunch some numbers. I went to the MLS and looked up all the sales that have closed in October so far. I then compared the sales price to the current tax assessment for those properties. I then increased the current assessment by 30% (the low end of the stated increase range) to see if the new assessment would be in line with market value. I only took the properties that have sold in Lake Monticello because the article stated that the work at Lake Monticello had already been completed, so they must be getting the 30%-50% figure from those assessments.
I found that there have been seven closed sales thus far in the month of October in Lake Monticello. Below is a list of the sale prices for those properties, and then the assessed value of those properties AFTER the 30% increase.
1)$188,000—–>$203,580
2)$205,000—–>$214,890
3)$219,900—–>$235,560
4)$225,900—–>$258,830
5)$244,900—–>$239,850
6)$265,000—–>$287,430
7)$299,500—–>$332,280
I want you to take notice of the fact that ONLY ONE of those properties sold at or above its adjusted assessment. The rest of the properties did not sell for the adjusted assessment value, and in some cases, the difference between the two was 10% or more. What this basically means is that 6 of the 7 homes that have sold thus far in October will be overtaxed when the assessments go out next year, unless they can acheive remarkable appreciation in the iterim. Given the current market conditions, that isn’t likely. Of course, in the event that the county adjusts the assessments of those 7 properties to reflect he most recent sales price, they will be right on target. That fact, however, is of no help to their neighbors.
For the sake of argument, I went back and checked the September sales as well. That search yielded similar results. I had to go back to February before the results started to make any sense at all. I wonder, however, will their be new assessments for the people who purchased their homes in February? Some of the current assessments for those homes reflected the sales price. To increase that assessment now by 30% would be horrific for those homeowners.
After examining the data, it would appear that Fluvanna has simply chosen a very bad time do conduct the reassessment. The rapid appreciation of 2004 and 2005 is what triggered the assessment, but the fact that it has been conducted in 2006 is very bad timing, indeed. The market has changed tremendously since only the beginning of the year, and many of the assessments that were done in February and March probably wouldn’t be considered accurate in November and December.
I sincerely hope that someone will be paying attention to the issue, and lower the proposed assessment increase. If that doesn’t happen, my fear is that the homeowners of Fluvanna will have to spend a considerable amount of time and effort challenging their individual assessments, or face the risk of being severely over-taxed on their property.
[tags] real estate, realtor, charlottesville, fluvanna, assessment, property tax [/tags]
-
Connect With Me
Proud Sponsor of RE Barcamp '08
Listen to ZebraTalk
Read the Zebra on AgentGenius
Disclaimer
My name is Daniel Rothamel. I am a licensed real estate agent in the Commonwealth of Virginia and a member of the National Association of REALTORS. As such, I adhere to a strict code of ethics and all laws with regard to equal housing, which is reflected in the content of this blog. My broker is Strong Team REALTORS, 86 Joshua Lane, Palmyra, VA 22963; (434) 589-5800. My VA Real Estate License number is 0225 077325. All of the opinions in this blog are mine, unless otherwise noted.
