General Reassessment

1. Introduction
2. Sales Analysis
3. Revaluation
4. Change in Assessment Notices

General Information

The process of annually reviewing assessment valuations as of January 1 is referred to as General Reassessment. Annual assessments are made by utilizing accepted professional real estate mass appraisal methods, techniques, and standards. Mass appraisal is defined by the International Association of Assessing Officers (IAAO) as “the process of valuing a group of properties as of a given date, using standard methods, employing common data, and allowing for statistical testing.” All real estate assessments are reviewed each year, although not all assessments are changed. Real estate assessments may increase, remain unchanged or decrease: Changes in assessments will result from changes in the real estate market, changes to the property (new construction, additions, demolition, rezoning) or corrections in property information. A "Notice of Assessment Change" is only mailed to those property owners whose assessments change: Requirements for notification are set forth in the Code of Virginia § 58.1-3330.

Sales Analysis

The reassessment process begins with research of recent sales. The real estate appraisers may disqualify some transfers from the sales analysis if they are not considered to be an arms-length transaction. Examples of transfers that may not be an arms-length transaction include family transfers, foreclosures, estate sales and other distress sales. It is sometimes necessary for the appraiser to extensively research a property transaction. Field visits to the sold properties are conducted to confirm the size of structure(s), property characteristics, outbuildings and site characteristics, as well as the property’s relationship to the surrounding area. Assessment neighborhoods are defined as a group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises): An assessment neighborhood may include properties from several subdivisions and conversely several assessment areas may be located within the boundaries of a single subdivision.

Sales analysis and reassessment of properties is done by assessment neighborhoods. The analysis begins by measuring the recent arms-length transactions against their previous assessments. The Constitution of Virginia directs real estate assessments to be fair market value. Market Value is defined by the International Association of Assessing Officers as "The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus, as of a specific date." The assessment divided by the sales price provides the assessment-sales ratio which will suggest if reassessment is needed.

Assessment / Sales Price = Assessment Sales Ratio
$180,000 / $200,000 = 90%

The real estate appraiser also analyzes the sales as an accurate estimate of the market value of the properties in the entire neighborhood.

Revaluation/Reassessment

Following sales analysis the real estate appraisers utilize the Proval® CAMA (Computer Assisted Mass Appraisal) to revalue assessment neighborhoods as necessary. The revaluation process begins with reassessment of the land which is followed by reassessment of improvements. A variety of statistical measurements of the assessment sales ratios are considered to select the best reassessment proposal. These measures include the quantity of sales, the range of sales prices, the median assessment sales ratio, as well as the coefficients of dispersion (COD), standard deviations and the price related differential (PRD) of the assessment sales ratios.

• Quantity of Sales - The number of sales during the specified period in the particular assessment neighborhood.
• Range of Sales Prices - From the lowest to the highest sales price.
• Median Assessment Sales Ratio - The middle assessment sales ratio when arrayed from low to high, or high to low
• Coefficient of Dispersion (COD) - a statistical measure of dispersion from the median.
• Standard Deviation - A statistical measure of dispersion from the mean.
• Price Related Differential (PRD) - The mean divided by the weighted mean. PRDs above 103% suggest assessments are regressive, where more expensive homes in the sample are assessed at a lower rate and less expensive homes are assessed at a higher rate: PRDs below 98% suggest assessments are progressive with more expensive homes in the sample assessed at a higher rate and less expensive homes assessed at a lower rate.

Changes in commercial and industrial property assessments also utilize income and expense data, and construction cost data. The request of income and expense data from owners of income-producing properties is authorized by the Code of Virginia § 58.1-3294. During June the Office of the Assessor of Real Estate makes a request of audited income and expense data from the previous year from commercial property owners: This information is used in the reassessment for the following January 1 valuations. During Office Review and Board of Review appeals income and expense information from the year immediately preceding the January 1 valuation date is not considered, as audited information from that period was not available to the staff to establish the equalized assessment values: Consideration of such information for select properties during appeals would violate equalization.

Change in Assessment Notices

Properties either increasing or decreasing in value will receive a Change in Assessment Notice in accordance with the Code of Virginia § 58.1-3330. The Change in Assessment Notice includes the previous assessment and new assessment, as well as information regarding the appeal process (Office Review and Board of Review).