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Assessor says foreclosure not factor in reassessments Date published: 2/26/2009 By Emily Battle BY LAUREN ORSINI
Foreclosures are a main factor driving housing prices down these days, but they won't play a direct role in the property reassessment under way in Fredericksburg. Mike Didawick of Blue Ridge Mass Appraisal Co.--the firm the city has hired to perform this year's reassessment--said Tuesday that foreclosure sales will not be considered as they reassess homes. "We are not using market foreclosures as a part of our market study because foreclosures do not meet the definition of fair market value between a willing buyer and a willing seller," he said. The Fredericksburg area has been among the hardest-hit in the state for foreclosures, according to recent data from RealtyTrac.com. In the city, Idlewild has experienced the brunt of the problem. The city hasn't been hit as hard as neighboring Stafford and Spotsylvania counties, however. One in 1,410 households in the city received a foreclosure-related filing in January, according to RealtyTrac.com. That figure was one in 237 in Stafford and one in 252 in Spotsylvania. Didawick did give a presentation on some home sales that were considered in the market study, which will continue through April. Homeowners will receive their reassessment notices that month. Didawick said some homes have been selling at 25 percent below their assessed values while others are almost holding steady. He said that as of last week, his firm has inspected 79 percent of total properties in the city. The last reassessment in Fredericksburg ended in April of 2007. Councilman George Solley asked at Tuesday's meeting why foreclosures shouldn't count toward a property's taxable value, since they do affect what neighboring homeowners can get for their properties. "I just don't understand why you don't use foreclosure sales when they actually do affect the market values of existing houses, should they be sold," he said. Didawick said that while he agreed foreclosures affect the selling price of a home, they do not meet the legal standard of sales to be considered for assessment purposes: a transaction that involves a willing buyer and a willing seller. After assessment notices are sent out in April, property owners will have an opportunity to appeal them. City Council members will begin work next month on the 2010 budget. The tax rate they set in that budget will determine how the new assessments affect tax bills. Reporter Emily Battle contributed to this story. Lauren Orsini: 540/374-5000, ext. 5617
in a forclosure the Bank or loan company is most certainly a "willing seller" they don't want to hold on to the property. The buyer is certainly willing, they are under no compulsion to be participating. They should be using all sales to determine the 'fair market value"
defines "Fair market value" as "the price that a good or service would bring between a willing seller and a willing buyer in the open market after negotiations. If the fair market value cannot be determined, the actual price paid for the good or service shall be given consideration."
If they allow foreclosures then they can also allow sales that exceed fair market value, making appeals to the appraisal board even harder.
That it what I was told by several City people. My impression is that the City is not that pleased w/ them either and would be thrilled if someone else bid. From the meeting, it was also apparent that council members were just as surprised as we were that foreclosures weren't included. I don't know what the law is about forcing an independent appraiser to use certain factors, but I bet that issue will be examined w/ future assessments. Blue Ridge seems to have gone w/ the minimal work involved.
An appraiser recently told me he arrives at a value using as comparables "arm's length" transactions, those from one owner to another (not a bank to an owner). That made sense to me and worked in my favor because it allowed me to refi. My recent appraisal still came in several thousand dollars lower than the city's assessment of a few years ago at the peak of the market. I don't see how you can accurately assess a fair market value if you attempt to factor in foreclosures.
I believe, so despite the conspiracy theory proposed by the prior post, I think it is simply reusing a vendor who has provided service in the past. That said, it is ridiculous to exclude foreclosures completely.
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