The Tax Profile.
I first wrote on this topic back in 2009, but I thought it would be pertinent to refresh the discussion since it goes hand-in-hand with buying and selling real estate in today’s market.
The San Mateo County Assessor’s Office maintains a database which contains a profile on every home that exists in the County. In that profile, among other things, are the basic specs of your home: The year built, location, square footage, number of bedrooms and bathrooms, lot size, etc… The Assessor’s office uses this profile as its guideline to assess property taxes each year. It’s a rather crude way to assess the valuation of a home, because like other automated estimation programs, it can’t really account for the subjective differences between homes.
But that’s not really all that important when it comes to buying or selling a home. The County automatically re-assesses the house when it changes ownership at 1% of the new purchase price, plus any amortized voter-approved bonds, and any fees for special assessments or charges such as mosquito abatement or sewer fees.
What is important is the fact that the data that’s kept in the County profile is often times incorrect, and this can pose some headaches for you when you go to sell your home.
The City of San Carlos, just like any other city within the County, carries the primary responsibility for all residential development within its boundaries. It has its own Municipal Code that governs what can be built and where, and it has the primary responsibility for maintaining ALL of the required documentation of any development, i.e plans, reports, and permits. Once a home is built, or a permitted modification has been made to a home, the City sends the appropriate documentation to County which allows them to update the home’s profile, and ultimately enables them to re-assess the tax value of your home.
In theory, it should be a straightforward and accurate process. But in reality, the profile the County has on your home is often incorrect. The errors I most often see pertain to the square footage of the house, or the bedroom and bathroom count. How does this happen?
There are a variety of reasons that may account for these discrepancies – sometimes the plans that get sent over to the County are misread by whomever enters the data. Sometimes the changes never get entered. And there’s also the problem of un-permitted work that owners do on their homes. Neither the City nor the County can account for changes in a house if the work was done without a permit.
So it’s really not a big surprise that there are often discrepancies between what you think, and the County thinks your home actually is.
Why Should You Care?
As I mentioned at the outset of this post, this becomes an important issue when it comes time to sell your home. Why? The Multiple Listing Service (MLS) uses the County Assessor’s data as the default source of the home’s vital statistics — square footage, bedroom and bathroom count, etc.. Why does it pull from the Assessor’s roll? Because it is considered to be a reliable, independent source for the specifics on your home. This “independent” part of this equation is important, because generally speaking, the seller cannot be held liable for incorrect data in the Assessor’s profile.
For example, if a home is listed as 2,500 square feet “per the Assessor’s records”, and the new owners measure the house to find that it’s only 2,410 square feet, it’s very difficult for the buyers to hold the sellers liable for the discrepancy because the sellers used an independent and widely accepted source of the data on their home.
Since the Assessor’s info is therefore considered to be the gold standard for home specs, it’s important to make sure that your home is represented properly in the assessor’s database. And if it’s not, you need to understand what can be done to fix it.
Any time that a seller has to deviate from the Assessor’s data, it raises the eyebrows of potential buyers. For example, if a seller claims his house is 2,500 square feet when the tax records show it is really 2,100, there’s always going to be a question in the mind of the buyer about the discrepancy, especially if there’s a possibility that it’s because of an unpermitted addition. Same goes with discrepancies in bedroom and bath count.
How to Fix It.
Generally speaking, the more documentation you have, the quicker the problem can be fixed. The County can update their records pretty much instantaneously if the homeowner can provide the correct documentation (plans, permits, etc..) You may have to consult the Building Department at the City of San Carlos to obtain this documentation, or to help understand why the discrepancy is there in the first place. The less documentation you have, the more the City may need to get involved. There’s a whole process involved for getting unpermitted space legalized, that’s discussed in this post.
How Is Your Home Represented?
Do you know how your home is represented in the County Records? For buyers, your agent should ALWAYS pull the tax data from the County before you complete the purchase to confirm that the tax data concurs with how the house is being represented for sale. Unfortunately, you generally can’t assume that the listing agent will adequately alert you to any of these kinds of mismatches.
If you’re a homeowner and you’d like to know how your home appears on the assessor’s database, just shoot me an email with your home address. I’d be more than happy to pull a report and email it to you.
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