It isn’t uncommon to be asked when showing buyers real estate in the Chilliwack area “What is the property’s assessed value”. Buyers view assessments as a useful tool but should it be relied upon?
I usually answer this sort of Buyer inquiry that the assessment are made as of July 1st and as a result may be higher or lower depending on a number of factors including: the market strength in Chilliwack, the time since the assessor last looked at the property and the individual characteristics of the real estate.
This month, I decided to have a look even though many Chilliwack real estate properties have not been assessed since 2008 or 2007. This research looks at the
October 2009 Multiple Listing Sales (MLS) of single family detached homes in the City of Chilliwack and compares them to their corresponding assessment value.
My thought was that if the assessments were within 5 % of the Chilliwack market that would be a pretty rule of thumb guide – the results were surprising.
Real estate in Chilliwack, and in the rest of the province of British Columbia for that matter, is valued by the BC Assessment which is a provincial Crown corporation governed by a Board of Directors. The job is a massive one given the number of property titles in the province. Personally, I hold the assessment authority in high regard having come to know many assessment people through the
Real Estate Institute of British Columbia which confers a professional designation on those dedicated enough to fulfill a demanding UBC education and gaining the necessary experience required.
Note: If you are ever looking for a real estate professional in British Columbia check to see if they have either in the initials
RI or RI(B.C.) behind their name. They are the professionals you need. Many assessment people also have an Appraisal Institute of Canada (AIC) designation.
So what were the results?
The Chilliwack real estate area in the month of October 2009 had 131 single family detached sales as discussed in the
last posting. Now, not all of these could be used. First Nation lands and newly built homes are not assessed. I also excluded properties in Hope and homes with acreage large enough to apply for a farmland exemption. This whittled down the sample size to 94. Not a bad sample size.
These 94 Chilliwack single family homes sold for a total of $34,672,791 and were assessed for $34,346,000.
In short, the assessments in aggregate were within
1%
of the total sale price value of Chilliwack single family homes sold in the month of October 2009!
Wow! I was quite surprised and pleased for the BC Assessment as well. This sort of result suggests that the Chilliwack assessors are doing a pretty great job.
Now, this does not mean that all assessments were within 1% of the sale price, to the contrary, there were wild swing on some properties, in particular, those with unique characteristics or located in more rural setting where market evidence is difficult to find. In one case, a property sold for $200,000 more than assessed value and in another for $86,900 less.
Of the 94 sales sampled, 48 properties sold for less than their assessed value, 42 sold for more and 4 were right on the money. The caution is, do not take the assessment value as being anything more than it is a great aggregate valuation process. Hire a local professional real estate person to answer any questions you might have about your specific property value in the Chilliwack area.
If you have any questions about your Chilliwack assessed value I would recommend that you go to the
BC Assessment site.
The analysis above is based on my interpretation of information provided by the
Chilliwack and District Real Estate Board and does not take into account private sales. The term "Chilliwack" is used here quite loosely to refer to an area serviced by the Chilliwack and District Real Estate Board which includes communities such as Chilliwack, Agassiz, and Harrison Hot Springs.
Stephen Mullock is a Chilliwack real estate associate broker with 29 years of experience. He can be reached at Royal LePage Wheeler Cheam Realty, telephone 604-792-0077.
Copyright November 5, 2009 by Stephen Mullock.
