PREPARING SUBMISSIONS ON THE MARKET VALUE OF YOUR PROPERTY
This section provides you with assistance in preparing submissions if you believe your property assessment is not at its market value (too high or too low). You will need to provide evidence and analysis to establish your property’s market value. You may wish to hire a professional appraiser, who has education and experience in this field. Alternatively, you should be able to prepare a reasonable analysis by applying a combination of market research, common sense, and a logical approach.
Step 1: Find Comparable Sales Data
The best evidence of the market value of your property would be if your property sold on the Valuation Date. Since that is highly unlikely, you should look for sales of other properties that are similar to yours in attributes such as size, age, and location, and sold as close to the July 1st valuation date as possible. There are two common ways to find sales data:
You should ideally have some sales comparables that are superior in quality to your property and some that are inferior. This is known as "bracketing" your property because it sets an upper and lower limit of your property's market value. In the next step, you will determine where your property's market value falls within this range.
If you cannot find adequate sales, you could provide listings for similar properties. However, please be aware that listings are usually considered less reliable than actual sales. Listings may only illustrate the upper end of value and do not provide a solid indication of market value.
You may want to take photographs of the outside of the sale properties and mark their locations on a map of the area, to show their location relative to your property.
Step 2: Prepare a Property Comparison Chart
Typically you use a comparison chart to explain the condition and attributes of your property, and then show how each comparable property is similar and how it differs. You then make adjustments to the comparable’s sale price to account for the influence of these dissimilar features.
Click on the link for: Tips on Value-Based Submissions
You should research whether or not you need to make a time adjustment. Look for an indication of how prices changed between July 1st last year and the date of the sale. If you know when the Interim Agreement was signed, this is the most accurate date to use.
You can find local market statistics at your local real estate board: see contacts for real estate boards. You can also request this information from your local BC Assessment office (although they may not be able to provide this to you).
If you find an indication of price changes between July 1st last year and the sale date, or close to it, then your analysis may already be done for you. For example, if the property sold on December 29, 2017 and the report shows a 6-month change of -2%, that will indicate that you should adjust the sale price for time by +2%.
Some reports show monthly benchmarks values. You can use the difference between the June or July value and the report value closest to the sale date to find the adjustment. For example, assume the property sold on October 15, 2017. If the June 2017 benchmark value is $421,000 and the October 2017 benchmark value is $406,000, the difference is -$15,000. The average change is $15,000/$421,000 or -3.6%. You would need to time adjust the October sale by +3.6%.
Some reports show a Housing Price Index (HPI), which is similar to the benchmarks values. For example, if the June 2017 HPI is 133.7 and the October 2017 HPI is 128.9, the difference is -4.8 and the average change is 4.8/133.7 or -3.6%. You would adjust an October sale by +3.6%
Making adjustments is typically the most difficult aspect of appraisal. There are two methods:
Method 1 Qualitative Adjustments: You may adjust for differences qualitatively: meaning subjectively rating the quality of each sold property’s attributes in comparison to your property. You can rate the attributes with descriptive words such as “similar”, “inferior” and “superior. This is illustrated in the sample qualitative comparison chart.
Method 2 Quantitative Adjustments: You may adjust for differences quantitatively or numerically: meaning adding and subtracting dollar amounts or percentages to account for differences. This is illustrated in the sample quantitative comparison chart.
Charts and Examples: To go to the charts click on: