This year, many property assessments have increased beyond what might have been expected. The market has slowed significantly so people expect lower assessments. I have a lot of people asking me how this could affect the sale price of their properties. The assessed value really just affects what you will pay in property taxes; it is not an accurate reflection of what your home is really worth, should it be sold. Some assessments will be too high; some too low...and most buyers know the assessed values are not a reliable indicator of what they should pay for a property.
The following is an explanation of the reasons why a BC government
property assessment and a properly prepared market assessment of your home may
be different. It explains the basics; if you have questions about your
particular assessment and its accuracy or lack thereof, or if you have
questions about appealing your assessment, please contact me. Assessments
must be appealed by the end of January 2013.
There are two main reasons that property value does not equal
market value: timing and information used to arrive at the value.
Timing: Property assessments are
based on government estimates of the value of the home in the previous
year as of July 1st. By the time you receive your property assessment it is
already six months out of date. A REALTOR®'S market assessment is usually
current within a few days.
used: Assessors value
approximately 2 million properties every year. We sell more than 99% of
REALTORS®* do but we still value fewer than 100 homes per year.
We therefore have time to look at a house carefully; the assessor obviously
cannot be familiar with 2 million houses, their renovations, street appeal,
etc. They look at fundamentals like lot size and house age but are not able to
factor in other important elements which may add (or detract) from the
property's value. They use a mass appraisal system where
a good REALTOR® will look at each home individually and will have been in not
only the home they are valuing but also the other homes which they are
comparing it to in order to determine likely market value.
Property Assessments seem to cause home owners a lot of frustration
because often they will expect the assessment to reflect value or they expect
their neighbour's home which is not as nice as theirs to be given a lower assessed
value but that is not always the case. I tell my clients to ignore the assessed
value except as an indicator of what may happen to their property taxes...AND
if the assessed value is too high, appeal it UNLESS you plan to sell your home
in the upcoming few years.
If you have questions about your home assessment, or more importantly
about the market value of your home, please contact me.
*According to REBGV stats for 2012.