The Discrepancy Between Loudoun County Tax Assessments and Fair Market Value.

Everyone knows that Loudoun County real estate property values have gone down significantly over the last several years, including 2007. For everyone's sake, I hope that the Loudoun County Tax Assessor realizes this as well when computing 2008 tax assessments. Everyone we've talked to in Loudoun County is upset about their assessed value and most are worried that their 2008 tax assessments will not be in line with their fair market value. The people who are even more upset are those who appealed their tax assessments earlier this year and were completely shot down without a good, if any explanation.

Yes, they're upset because they've lost market value. But why are they really upset? Because 2007 assessed values are up to 30 percent higher than current market values (non-foreclosures or short-sales) and they think that the Tax Assessor doesn't care. That means that Loudoun County residents are paying up to 30 percent more in taxes than they should.

For example, the property located at 904 Amelia Street in Sterling, VA just sold for $276,450 net. It was assessed at $392,200. That's a $115,750 (30 percent) discrepancy between assessed and market value.

In the FAQ section of the Loudoun County Tax Assessor's web site, it states:

"Information is gathered from buyers, sellers, and real estate professionals. The bonafide selling prices are then compared to the assessed values to arrive at an assessment/sales ratio. The county is required by law to assess at 100% of fair market value."

Neither myself nor any consumer, real estate agent or broker I have run across has been contacted by the Loudoun County Tax Assessor regarding their opinion, expertise, stats or data regarding Loudoun County real estate market values.

This discussion brings to a poll we'd like for you, the consumer and real estate professional, to take. Though values vary by specific community, this will give us, you and the Loudoun County Tax Assessor a general idea of what the residents of Loudoun County think about market versus assessed values for 2008.

Related Articles:

Loudoun County Set To Steal $45 Million From Residents In 2008

*This post was edited 12/29/07 because it was brought to our attention that part of the post could be misinterpreted and those items have been deleted.

Comments

[Cascades TH Owner]

Don't forget that real estate taxes are the product of assessment multiplied by the tax rate. After the assessments are done, then the board of supervisors sets the rate based on their mood and what the (usually school) budget needs are.

For example, even though my TH was assessed at $379K in 2005 and $502K in 2006 (a 32% increase), my total tax "only" went up 13% because the rate went down from 1.04% to .89%. When my assessment went down in 2007, the rate was adjusted up to .96%. My total tax bill still went down, though, for the first time in eight years. Bet that won't happen again.

Regarding county assessments, I think it's very hard to take a snapshot of the market given how volatile it is.

[Danilo Bogdanovic]

Yes, you are correct in how the county comes up with the dollar amount that a home owner has to pay. But the assessed value and tax rate are two different items and topics of debate. You have to get the assessed value to be 100% of fair market value - that's the law.

Then comes the debate over the rate...

[realistically speaking]

"You have to get the assessed value to be 100% of fair market value". Sounds solid in principal, however seems harder in practice. After all market value is a fluid number that is subject to market volatility. In turbulent market this value is often hard to find and really more of a moving target. For example just look at the past few years of growth, the market value of a house from one month to the next was appreciating in an abnormal pace (the normal context here is in regards to average historical increases in home values). Plus there is a real cost in providing assessments, which limits the number of assessments that can and should be done during the year.

[realistically speaking]

"You have to get the assessed value to be 100% of fair market value". Sounds solid in principal, however seems harder in practice. After all market value is a fluid number that is subject to market volatility. In turbulent market this value is often hard to find and really more of a moving target. For example just look at the past few years of growth, the market value of a house from one month to the next was appreciating in an abnormal pace (the normal context here is in regards to average historical increases in home values). Plus there is a real cost in providing assessments, which limits the number of assessments that can and should be done during the year.

[Shafted for 10 years]

The day I bought my house in western Loudoun, the county assessed it at $150,000 above the purchase price. I just sold it for $300K below their "fair market" value. Never once in a decade has anyone done an actual assessment. They sit on their thrones and throw darts. I regard them as thieves, pure and simple.

I protested and they declined to do anything. The unofficial bottom line was "we're shafting everybody and not going to open a can of worms just for you." Sue them to recover? Nope. They have a cute little statute that says they don't have to refund ANYTHING. Not that I could afford an attorney. Could barely afford heat and the property tax most of the time.

A couple hundred thousand on a million-dollar house; big deal, right? Wrong. This house cost me $100K and was a fair price since it was one step away from being bulldozed. Not much better now, either.

My opinion? (Pretty hard to guess.) Every single member of the Board of Supervisors and the entire staff of the Assessor's office should be behind bars. "Fair market value" ??? In a pig's eye. They invent whatever assessment they please to raise whatever amount of cash they choose to steal from the public every year.

[Get it right]

The information in your post concerning the assessment process in Loudoun County is erroneous and inflammatory. First of all, the correct title is the County Assessor and the position has nothing to do with establishing taxes. Second, if you take the time to thoroughly read the Assessor’s web page, you will see that your Sterling example is flawed. Properties are assessed at fair market value as of January 1st of each year. Third, a true real estate professional would not write inaccurate information and present it as truth. If you want readers to take you and your blog seriously, then take the time and make the effort to get the facts straight.

[Brian Brady]

"That means that Loudoun County residents are paying up to 30 percent more in taxes than they should."

I don't think that statement is correct. While assessed valuations may be 30% too high, the taxation rate (sometimes called the mils) would drop.

The total collected tax is spread out over the aggregate valuation. So, (and I'm making up the numbers), in a Virginia county that has a $10 million budget, the aggregate valuation wouldn't matter; the county is going to collect $10 million over $1 billion or $1.3 billion.

If the aggregate valuation is off, the mils rate will drop.

Am I incorrect or isn't that how Virginia counties colect property taxes?

[Dave Barnes]

Anyone who believes this: "The bonafide selling prices are then compared to the assessed values to arrive at an assessment/sales ratio." is retarded.
Counties/Cities use computer programs (based upon some sort of statistical sampling) to adjust "market values".
You may assume that the statistical sample will reflect whatever "answer" the government desires.
And, I don't hide behind a screen name.

[Laurie Manny]

While I realize that laws and methods of computing will vary from state to state, in California voters passed Prop 8 back in 1978; a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a “decline-in-value.”

Also, if you disagree with the assessed value of your property, you can contact the Los Angeles Assessor’s Office to request a review of the value. If the matter is not resolved to your satisfaction, you may then file an appeal with the Assessment Appeals Board.

The Los Angeles County Tax Assessors office has conveniently placed this and other valuable information on their web site.

Why hasn't the assessor in Loundoun County made similar provisions?

[Get it Right]

The Loudoun County Assessor's office has a review process that is explained in detail on their website.

[Danilo Bogdanovic]

"Get It Right" - Where/who do you get your information from?

[Get it Right]

Danilo - I read the County Assessor's website. There's an Assessment Review Application Form which explains the process for review or appeal.

[Danilo Bogdanovic]

I and the rest of Loudoun County understand the process of how to appeal assessments to yourself and your office, as well as the Board Of Equalization.

What I don't understand is where you're getting your information from pertaining to your first comment, which is:

"The information in your post concerning the assessment process in Loudoun County is erroneous and inflammatory. First of all, the correct title is the County Assessor and the position has nothing to do with establishing taxes. Second, if you take the time to thoroughly read the Assessor’s web page, you will see that your Sterling example is flawed. Properties are assessed at fair market value as of January 1st of each year. Third, a true real estate professional would not write inaccurate information and present it as truth. If you want readers to take you and your blog seriously, then take the time and make the effort to get the facts straight."

Any facts or figures to substantiate your claims?

Here's how and where I got mine:

The sold information is from the MLS and it's also public record (recorded in Land Records at the County Courthouse). Anyone can look up the specific property used in the blog post to confirm that was the sales price. I can also email you the information if you'd like.

The 2007 assessed value is found on the MLS as well as the County web site. Anyone, including you can access that information.

I then subtracted one from the other to get the discrepancy between the two at the time of the sale of the property (Dec 10). Simple addition and subtraction.

Please help me and everyone else understand what you mean specifically, as well as what facts and figures you're using.

[Get it Right]

Danilo or Tony (?)- Do you think I'm the County Assessor? That's funny. I am not him, I do not work in the Assessor's Office, nor do I work for the County.

It sounds like you and your partner don't understand the assessment process. Don't you think you should have gotten your ducks in a row before writing your post? According to the 2 emails you put on your blog, the Assessor offered twice to meet with the staff in Keller Williams to explain how and what his office does. It would be prudent for someone in your organization to take him up on that offer.

I noticed that Tony longer lists his association with Keller Williams. Could that be related to his blogging activity?

[Tony Arko]

Much like Mr. Kaufman, you fail to answer the question at hand. Please help us all understand yours and Mr. Kaufman's position by pointing out to all of us the erroneous and inflammatory information you speak of.

Also, Mr. Kaufman has never offered to speak to either Mr. Bogdanovic or myself regarding the assessment process. Lisa Jalufka, the broker who spoke to Mr. Kaufman, asked that he speak to the entire Keller Williams office in Sterling. He has not responded to that request. In fact, he has cut off communications with Mr. Bogdanovic, Ms. Jalufka and myself.

[Benn]

Interesting. So, a public county official is upset because you're having a public debate on county taxes and their assessment? Is there something wrong with telling the public to look twice, maybe three times at their tax bill? Come on.

amazing.

[RealtorJane]

Well now. This has gotten pretty ugly based on some of the blogs I see attached to your site. Wow..too many REALTORs with too much time on their hands. Go sell something.

I'm not really following your constitutional stand as I'm not sure how your rights were threatened by any of this. Boys will be boys though. I read the emails and the guy was pretty clear about not demanding, but requesting that you clean up your info. I don't really want to try and tackle that issue though.

Here is where this all gets interesting, I think that I am the person that brought your articles and web page to Mr. Kaufman's attention. I am a long time local REALTOR. I know your boss and I know of the three of you (broker included). I was looking for some real estate stats on the Net and stumbled onto your site. I was confused by your articles so I called the Assessor's Office to get their side and actually spoke to Mr. Kaufman. He's was extremely friendly, professional, seems like a good guy, and from what I can see (my opinion of course), he's pretty cute based on his picture. Not the one of the horse that you have linked to your site. That's pretty tacky and petty. You guys should really take the time and read the Code of Ethics regarding the use of the Net...wow.

Anyway, I live in Loudoun and pay taxes like the rest of the world. By the way and nothing personal but, you don't speak for the people of Loudoun. Do you guys even live in the County? I was confused by what you boys put on your web page and wanted to make sure I understood the process as your numbers didn't make sense. So I clicked on the link you provded to the Assessor's site, then called the Assessor's Office. Mr. Kaufman was not aware of your site, but explained the process to me and referred me back to the Assessor's web page for a heck of a lot of good data. Your information does conflict with the info on the Assessor's page. Oh, and by the way, I checked the sale that you guys use in your $45 Million issue article. The example that you guys give was sold through MLS. It says in the listing that it is a "short sale". Any REALTOR with an ounce of sense and any good appraiser would not use a short sale in an market analysis....duh. It probably sold for far less than market value. He's right, that is misleading along with a bunch of your other stuff you guys present as factual information. Hello...hope you are listening here. Do your homework.

Sorry, I digressed...Mr. Kaufman told me that the sales that you used in your articles occurred after the date of value so your stats are skewed..therefore your overall analysis of the issue is WRONG. I think other readers have expressed that to you already though. I don't have a beef with you guys and I like your boss, she's great and a top producer, but again, he's right, your web page is pretty darn misleading...yep Standards Violation. You need to clean it up. Its your responsibility to do that not his. He works for the taxpayers not your real estate company. From that perspective, I'm glad he selected not to get sucked into this.

You guys have a responsibility to get your facts striaght before you posted this kind of stuff. I sure hope you haven't put your's and the career of your broker at risk by taking a stand on shakey ground.

Oh, I saw your letter from the Western folks, whoever they are. Pretty interesting group....lol. Is it cactus or cacti...whichever, San Diego loves you guys. God Bless America. I clicked onto their link. Are the livestock in Arizona safe? The pictures of their Board and Officers are interesting to say the least. Nothing personal Western folks. I'm sure you are very nice people regardless of what your agenda is. Keep up the good work! We need people like you out there. They may want to check you out and leave Mr. Kaufman alone though.

I hope the local Board of Realtors steps in to clean this mess up before you and your band of bloggers make a mockery of the hard working REALTORS out there.

Fella's, just a suggestion. I'd at least apologize to Mr. Kaufman and the public for what you have done here.

I'm going to forward a copy of this to your boss and the owner of your company via email in case you decide not to post it. I'm guessing she is not aware of what occurred here and she would probably like to know.

[Tony Arko]

Of course we are going to leave your comments on our website because it is a representation of a different opinion in regards to this issue (even though it appears that your are very much in the minority).

As for our "boss" not knowing what occurred, you couldn't be more wrong. She is aware of everything.

Also aware of the situation is the President of DAAR and DAAR legal counsel, VAR legal Counsel, the President of VAR, legal counsel for the CC Sells Team, and managing broker for Keller Williams.

Just as a note, when a Realtor writes a comment on a blog and identifies themselves as a Realtor, they should write their entire name so that someone reading their comments can contact them directly. All of our blogs and all of our comments on other blogs have our full names and links back to our sites. You have failed to do so. If you don't mind, could you please do so in future comments. That way the general public won't think you are trying to hide something. Thank you.