Real estate Q&A: Understanding your property tax statement
YOUR JOURNEY HOME
Free Press Real Estate Columnist
Q: I am anxious to sell my house but about two weeks ago I received my property tax valuation and it scared any profit on the house sale right out of me. I bought the house in March 2011 for $265,000 and the county is telling me it is worth $217,000. How the heck did the Mesa County Assessor’s Office come up with that number?
A: There is no doubt about it, property values or sales prices in Mesa County today can be: 1.) Very scary; and 2.) All over the board.
As for the tax-assessed value, I called our local assessor’s office where I spoke with County Assessor Barbara Brewer. I will boil down some of that conversation here to help you understand where they came up with that value on your “2013 Real Property Notice of Valuation.”
First, Brewer said their values may or may not reflect a price that your house may sell for in June or September or November of 2013. State law and the Colorado State Constitution define how all 64 county assessors are supposed to assign “taxable value” to real property. The state-mandated prescription is based on looking at sales prices of homes most similar to yours from a time period back 18 months. In the case of 2013 taxable value, it is calculated by looking at sales prices from June 20, 2012, back 18 months to Jan. 1, 2011.
And if you recall the local homes sales market as a whole in January 2011 was trending down. By early 2012, there were signs the market decline had slowed or may have started to level out. By June 20, 2012, it is widely accepted that Mesa County home sales prices had stabilized and in some cases began to creep back up in value, on a house-by-house basis. All in all, you can see that the 18 months the assessor’s office had to pull sales prices from was in decline.
That declining value data had to be plugged into what is known as a computer-assisted mass appraisal model or CAMA. That means your property was valued not by a human appraiser like it would be for a purchase loan or home refinance; but, the value was determined by a computer model using complex statistical analysis. Admittedly, that model must be pretty “smart” since, according to Brewer, the assessors’ practices are audited every year to be sure they are operating within the legal guidelines established by state laws.
Brewer also informed me their model is calibrated to assess dozens of variables between one house and another: Is that two full bathrooms or does one only have a shower and not a tub? Was there a building permit for $17,000 of work in the kitchen remodel of that house but not another of similar age on the same street? All of these sorts of details go into fine tuning the computerized “look” given to each of the approximately 72,000 properties on the Mesa County tax rolls.
Brewer also remarked that residential land has generally gone down in value. The tax assessment is based on the two parts of a property — the real property improvements (house, garage, patio, etc.) and the land itself. In many cases your real property improvements may have maintained value but the land value may have declined. Brewer admitted that due to the past declining market, the effects of foreclosures and individual variability’s between houses, the assessed values are all over the board with this assessment period.
Doug Van Etten is a local Realtor with Keller Williams Colorado West Realty. He is also founder and organizer of the Real Estate Investors Network of Western Colorado (www.REIN-WesCO.org). For information about buying or selling a home, contact Doug at 970-433-4312 or DougVE@kw.com.
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