Full/market assessed value?

[Jeff Horton]

Studying for the FHA test again. On the VC sheet where it asks for Full/market assessed value exaclty what are they referring to? Is this the Tax Assessors value? The more I read the more I am uncertain.

 

[Ben Vukicevich SRA]

Jeff,

We had a discussion about this long ago on the old forum and there were many different answers. FHA's wording is confusing.

Some will say it's just the assessed value. Others will say it's the assessed value divided by the equalization ratio.

In NJ, the equalization ratios are published for each municipality and that's what I use. The assessed value divided by the equalization ratio yields the full/market assessed value. Well, sometimes.

Then they tell you if you can't develop it to put N/A in the box. It's just another way they check your value by comparing it to something. Hey, how do you compare the appraised value to N/A????

I really don't take that "box" very seriously.

Ben

 

[Damon Pedersen]

Having just completed the FHA exam a couple months ago...DONT worry about it. No questions about that on the test. Mine had like 3 or 4 questions about new construction in an airport fly zone and various airport related junk so that was the biggest challenge for me and I probably got those wrong because I guessed.

Damon

 

[AC King]

It can be somewhat fuzzy, but in 4150.2,CHG-1, D-34, Field A. Assessed Market Value --- Protocol o "Enter the assessed market value in the VC addenda. (It varies by municipality but is entered only when the value is represented as current.)"

In Texas the assessed value is supposed to be the same as the market value, but taxing authorities are limited to 10% increases annually and sometimes the assessed value is considerably different than the market value. As a matter of practice I include the assessed value as listed on the County Appraisal District records or the County Tax records whichever is most current. Luckily, we have both available via the internet.

It is probably more prudent to enter whatever is available from your local records than marking the space as "N/A." Helps to avoid unnecessary inquiries about the VC Addendum.

Think beyond the test to the actual FHA appraisals you will be completing. The test takes about 20 minutes including completing the long questionaire that has nothing to do with the test.

 

[Terrel L. Shields]

Having served on a Board of Equalization, and studied the way AR, OK, CO, & MO counties do assessments, I believe I can safely say, the appraisals by the assessor, whether in house or mass appraisal company, have about as much to do with "market value" as bull fighting has to do with the Dept. of Agriculture (with apologies to Earl Butz, former Secy of Agriculture.)

Ter

 

[Larry Lyke]

The one thing the current market alue isn't is the assessed value.

In order to correctly determine the assessor's "market value," you either have to be given the actual figure or you have to know the formulae by which the other categories also are derived.

n short, you have to know and understand the assessor's formulas.

Having said that, that doesn't mean the VC sheet market value you use is in any way meaningful in relation to the appraisal report EMV.

 

[Don Clark]

8)

I am always amazed at what I read on this forum, and the notions some have on how to answer a very simple question. The assessed value means by assessment. Now who in the worl does assessments :idea: Walla :!: The assessor do, in every City, County or region of the country, territory, and or legal municipality. When I was receiving training to do FHA Reviews someone in attendance asked this question. The answer. "The assessment, of course". I have also checked with REAC, and HOC's. Same answer. Then what do you mean by "Full" assessed value :?: Well, every assessor always breaks down the assessment by land and improvements. A full assessed value means land and improvement(s) value added together. How much more simple could that be :?:

"If you can't dazzle them with brilliance, baffle them with B***S***"

Soryy, all you formula happy folks, no real formula needed here if you can add 1+1=2.

Don

 

[Ben Vukicevich SRA]

Don,

Sorry to burst your 1+1=2 bubble but you better have the REAC and HOC folks read the Appraiser's FAQ on the HUD website. Page 5 Number 7. You/they have only half of the equation necessary to solve the problem of "assessed market" value.

Here's the FAQ stuff. Be amazed at what you read.

"The assessed market value is different from the assessment. The assessed market value is the assessor's opinion of market value used by the homeowner to determine if the taxes are reasonable. The assessment is often a fraction of the assessed market value used to calculate the taxes (assessment x tax rate = taxes). The assessment often does not relate to market value. The process to relate the assessment to the assessed market value is known as equalization. If there is no equalization method, the appraiser should indicate N/A as the assessed market value."

So they don't want just the land and improvement assessment in the box. They want it brought to current assessed market value. If you have an equalization method available, it should be applied to the full assessment so the homeowner can determine if the assessor's opinion of market value is reasonable-AKA, it's time to file a tax appeal because my assessed market value is too high. The assessor's opinion of market value is $125,000 and I'm paying $100,000 for the home. If you can't equalize it, you put in N/A, not the total assessment used to calculate taxes.

As I stated in my previous post, NJ publishes equalization ratios for each municipality. So in NJ an equalization method is available. You would take the full assessment (Land and Improvements AKA 1+1=2 in your post and then divide them by the equalization ratio to give the borrower an indication of what the assessor thinks his home is worth at current market value. Such as Land $40,000 + Improvements $60,000 = $100,000 full assessment divided by the equalization ratio of .85(or homes in this municipality are assessed at 85% of market value) = $117,647. That's what the assessor thinks the home is currently worth and that's what value you will appeal, if you file a tax appeal. Consequently, if you build a new home in that municipality, the assessor will value to current market value then use the equalization ratio to bring the current market value back to the last assessment date- so if he thinks your new home is worth $117,647 and the equalization ratio is 85%, you're assessed at $100,000.

Strange stuff, huh. And just try to put N/A in that box if it is not new construction and you can't relate it to market value as HUD states. Everytime I did it, the lender would call and say the HUD computer needed a figure in that box, any figure, or they couldn't finish inputting the data.

So appraisers must also know how to divide....................to provide the current full/market assessed value

Ben

 

[Larry Lyke]

Don --

You have to interpret what FHA is asking for.

The information on the VC form itself and the protocol in the 4150.2 are the reason the guy is asking the question. It's too vague.

My interpretation is correct. Ben's is a full-dress interpretation.

 

[TC]

Sorry Don, but WALLA drives me nuts! Try Voila

voi·là
Variant(s): or voi·la /vwä-'lä/
Function: interjection
Etymology: French, literally, see there
Date: 1739
-- used to call attention, to express satisfaction or approval, or to suggest an appearance as if by magic

tc