Assessed Too High!

A couple of weeks ago I got a call from the town of Henrietta assessor's office. They asked me about a former listing that I had that was assessed at $145,200 but sold after 18 months on the market for $115,000.

"The house didn't appear to be distressed. In fact, looking at the old listing it looked quite nice. Were we that wrong," the assessor asked?

My professional opinion is that the house should have sold for $129,000 but the sellers were convinced that the house was worth more based on the assessment. By the time the asking price was reduced to $129,000 the house had been on the market so long that the public was convinced that there was something wrong with it. After all, nothing depreciates a house faster than a for sale sign!

The assessor was quite distraught! The owners had never called to question the assessment. When I shared with her the flaws of the property, she agreed that it should have been assessed for less.

This is a sad story. The sellers lost a lot of money on this property. I spent hundreds of dollars advertising the property, conducted 7 open houses and more than 30 showings. The sellers was frustrated and angry at me for not selling it and listed it with another agent. It still took several months and numerous price drops to get the job done. I guess the only winner is the new buyer that got a heck of a deal on an 1800 sq foot ranch.

The moral of the story is it is okay to protest your assessment. And if you are going to put your house on the market, price it right in the very beginning.

Buying Based on Property Taxes

"The biggest disparity between New York and the rest of the country is the property tax."

That's what the front page of today's Democrat and Chronicle reported! No sh#%t!!! I talk to people all the time that are considering relocating to New York and once they get a peak at the property taxes, well, I need to bring out the smelling salts!

Case in point, last week I got a call from Costa Rico from a gentleman considering waterfront property in the Finger Lakes. He picked out two properties, similarly priced, located about a mile apart. One has annual property taxes of approximately $8799 and the other tax bill runs about $11,500. Interestingly, the house with the lower taxes has an asking price of $11,000 more than the other and from the questions that this buyer was asking, I got the feeling that he was leaning towards the more expensive house with lower taxes.

The house with the lower taxes was assessed for approximately $90,000 less than it's competitor. The reason, it has approximately 1800 sq feet of living space compared to 2500 in the other house. Both houses have similar lots and were close in age. So, while no one likes paying higher taxes, the larger house with the lower list price is probably the better deal.

Reassessment in the City of Rochester

We got the letters in the mail several weeks ago announcing a reassessment of all residential and commercial property in the city of Rochester during the next four months. There was a neighborhood meeting last night with good information about the assessment process.

The city announced that on average, property assessments will go up 10 percent in order to have assessed values closer to market value. Of course, that fact caused many groans as most citizens thought that meant property taxes will go up 10 percent. The representative of the city assessor's office did a good job explaining that an increase in assessment doesn't automatically mean an increase in taxes. Tax rates are based on budgets and if the budget stays the same and all assessments increase the same amount, that taxes stay the same.

Of course, not all assessments will change the same amount. If that was the case, there would be no need to do the assessment. In some neighborhoods, properties are selling for less than what they were in years past and so those assessments will go down. The staff appraisers are in the process of studying recent sales in an effort to assign a fair market value and letters will be mailed in December to inform property owners of their new assessed value.

Property owners that disagree with their new assessments can request an informal hearing, which will be held December through February. If the issue is not resolved, the owner can apply for a formal hearing. THE DEADLINE TO APPLY FOR A FORMAL HEARING IS MARCH, 18, 2008 --NO EXCEPTIONS! Final assessments will be announced May 1, 2008.

What can you be doing about this? First and foremost, you need to make sure the city tax records are accurate. The letters mailed to us gave basic information such as lot size, sq footage, number of bathrooms. If you'd don't still have that letter, you can find your tax information on the city web site: http://www.cityofrochester.gov/. . You don't want to pay taxes for an 1800 sq foot house if your house is actually 1675 sq feet! I will include some information at a later date about property values and how to determine if your property is fairly assessed.