THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, March 23, 1996 TAG: 9603220456
SECTION: REAL ESTATE WEEKLY PAGE: 04 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY JEANNE MOONEY, SPECIAL TO REAL ESTATE WEEKLY
LENGTH: Long : 114 lines
Portsmouth's real estate assessor has been asked if he makes a commission when his staff hikes property assessments. He doesn't.
Chesapeake's assessor has been asked if he'd raise the assessed value of a home for sale, in vain hope of supporting the seller's notion of a fair asking price. He wouldn't.
And Norfolk's assessor has gotten an earful or two from homeowners who believe the assessed values are driven by politics and pushed around by the whimsy of a city manager or council. ``Nothing could be further from the truth,'' says Wayne N. Trout, the city's real estate assessor.
Pity the misunderstood municipal assessor.
They and their staffs of appraisers spend the year bird-dogging building permits, updating assessments to reflect a new addition here, a new pool there. They trek around neighborhoods, noting worn-out roofs and spiffy new sidings. They sift through a mountain of data about property sales, comparing homes by size, age, location and exterior. And then what happens?
They come up with a number, an assessed value, and it gets used to compute property taxes. No wonder they get the guff.
You're not in the happiness business,'' says William E. Froehlich, Portsmouth's real estate assessor, about his work. ``You learn that from Day One.''
Heaven forbid anyone should belly up to the counter in a real estate assessor's office just to say, ``Atta boy.'' Unh-uh. Homeowners go there soon after a fee appraiser values their home for $750 less than the municipal assessor did.
``If they're overassessed, people are going to step forward,'' Trout says. ``If they're underassessed, you're never going to hear from them.''
``In the eyes of the taxpayer, the assessor is never right,'' Trout says.
In the past three weeks, assessors in Chesapeake, Portsmouth and Virginia Beach have been reminding us of the work they do. They mailed notices to owners of 190,000 residential, commercial, industrial and farm properties - in some cities only when the assessed real estate values changed.
Norfolk residents have been getting the news since Sept. 1, while Suffolk residents won't hear until early June.
Overall, the assessed values of residential property in Chesapeake, Norfolk, Portsmouth and Virginia Beach reflect a market making modest appreciation.
How do the assessors arrive at the values?
``It's not an exact science,'' says Trout.
``It takes some judgment,'' says Gerald D. Banagan, Virginia Beach's real estate assessor.
Assessors are guided largely by market data. They work systematically, targeting neighborhoods and comparing assessed values they assign against actual sale prices. This gives them a percentage they call the assessment ratio.
For instance, the assessment ratio is 88 percent for a home that sold for $108,500 but was assessed at $96,500.
``If you can stay in the 94 percent to 96 percent range you've done a reasonably good job,'' says Trout.
Assessors flag for a re-check homes whose assessment ratios fall far outside the range of 94 percent to 96 percent. They will call the owner or visit the property to find out why their assessments were too high or low.
Assessors may add value for amenities such as an in-ground pool, a hot tub, a brick exterior or vinyl siding. In the Kings Forest section of Virginia Beach, for instance, a hot tub adds $1,500 to the assessed value and the typical pool adds $8,000.
In Kings Forest, homes typically are valued at $29 to $40 per square foot of space, depending on their size. A brick exterior or vinyl siding raises by $1 the value of every square foot of living space. Improvements such as an addition add $28 for every square foot in that room, while a Florida room adds $27 per square foot of space.
``It can be hard sometimes to quantify the actual value of an improvement,'' says Froehlich. ``It's difficult to say how much the market is going to recognize a new kitchen.''
Assessors and their teams of appraisers also have the latitude to make judgments that can move a property's assessment up or down. They can adjust values to account for rotting wood and peeling paint on one home and six-piece crown moulding with hand-carved woodwork and hardwood floors in another.
``We're assuming that the house is in average condition in the neighborhood,'' says Banagan. ``If they've got a settling problem, we can make a deduction in their assessment.''
A city assessor's work is different from a fee appraiser's. A fee appraiser typically compares one home against three or four similar homes to arrive at a value. City assessors use a mass appraisal method and compare a home against far more homes in a neighborhood.
Also, a fee appraisal often is used during the process of selling a home or refinancing a mortgage. A city assessment is done annually as a basis for property taxes. A fee appraiser uses current information, and may spend a day or more valuing a property. A city assessor may value a whole subdivision in a day.
By law, assessors must appraise property at 100 percent of its value. But, because they are comparing homes against similar ones that sold 12 to 24 months earlier, the assessed values tend to fall short of current sale prices.
``Usually our assessments lag behind the market,'' says Laurence Street, Chesapeake real estate assessor. ``What we try to do is not have such a big dispersion'' between assessed values and sale prices.
Street remembers when Chesapeake adjusted the assessments citywide. Some residents called to complain about falling property values.
``Ours is a double-edge sword,'' Street says. ``We can't win when we raise them (assessments). We can't win when we lower them.'' ILLUSTRATION: [Cover, Color illustration]
JOHN EARLE
The Virginian-Pilot
KEYWORDS: TAX ASSESSMENTS HOME ASSESSMENTS by CNB