A couple months ago, Sherree Quackenbush had her south Bibb County home appraised as part of a mortgage refinancing.
The value came back at $160,000 — the same amount she built the house for in 2007, she said. So when her new property assessment from the county came in at $173,000, she was floored.
“I don’t think in today’s market that I could even sell my house at $160,000 right now,” Quackenbush said.
Property is supposed to be assessed at fair market value — that is, what a willing buyer would pay a willing seller in an arm’s length transaction under no duress.
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But in mass appraisals such as Bibb’s recent countywide property revaluation, which included a review of about 68,000 parcels, there’s room for error — some of which the law allows. That could explain why some homes are valued for more or less than a recent sale price.
“Now, we should be fairly close,” Chief Appraiser Andrea Crutchfield said, but the nature of a mass appraisal can be imprecise.
In a mass appraisal, appraisers look at recent fair market sales based on neighborhoods, where sales can vary from property to property. To do otherwise and set values based on individual properties would be called “sales chasing,” which is illegal, Crutchfield said.
Appraisers also do not go inside the homes, which could affect a property’s value either way, depending on the condition. In addition, something could have happened to the property between the time it was appraised and Jan. 1, the date for which property is valued.
Finally, data could just be entered in the system wrong, Crutchfield said. That’s why there’s an appeals process to tie up any loose ends.
Guy Gunn, vice president of residential sales for Fickling & Co. Inc., said a mass appraisal is probably not as accurate as a typical residential appraisal.
“For that reason, they tend to try to be a little conservative. Sometimes they’re not. Sometimes they miss the mark completely,” he said. “Given the process we’ve just gone through, there’s a lot of room for error out there, so they could be off one way or another by a fair amount.”
To verify that properties are being assessed accurately, the state uses a sales ratio to compare properties’ assessed values with actual fair market sales.
Because properties in Georgia are taxed at 40 percent of their fair market value, the ideal sales ratio is 40 percent. However, the state knows that the mass appraisal process is inexact, and it gives counties a bit of leeway in its assessments, accepting a sales ratio ranging from 36 percent to 44 percent without penalty.
That means if a house sold for $100,000, its assessed value — or that of a similar house in the same neighborhood — could reasonably range from $90,000 to $110,000, according to state standards. Likewise, an acceptable range for the assessed value on a home that sold for $200,000 could range from $180,000 to $220,000. That’s about a 10 percent difference in either direction.
The sales ratio for the new property revaluation, based on 2008 fair market sales, is just at 40 percent, Crutchfield said.
The sales ratio and other statistics, Crutchfield has said, show that this year’s revaluation is in line with state standards.
In 2007, the most recent year available, Bibb’s sales ratio for the entire county was about 33 percent. The county has received fines for its properties being undervalued.
Gunn said a lot of homeowners were shocked by their new assessments because the values increased more than homeowners thought they should.
But the amount of the increase is not the issue, he said. Rather, it’s how the new value compares with fair market sales in the area. If a house is valued at what similar houses are selling for in the neighborhood, the assessors did their job, he said.
However, he disagreed that a home’s assessed value should ever be higher than what the same home sold for.
“The assessed value should not be any higher than the sale price,” he said. “If it’s a little lower, that would be tolerable.”
Some homeowners now trying to sell their homes are hoping their sale price actually will be much higher than their assessments.
Tony May saw his value increase 32 percent, to $188,500, in the recent revaluation. But he’s spent about $25,000 in remodeling expenses at his Shirley Hills home and needs to sell it for at least $200,000 to get his investment back, May said.
It’s listed at $239,000, in the price range of other similar homes that have sold, he said.
The potential buyers have been scarce, though.
“This is not a sellers market,” he said. “I’ve not had a lot of people want to look at this house.”
To contact writer Jennifer Burk, call 744-4345.