At first glance, it’s a very simple question: what is my Northern Virginia home worth? The answer, however, may not be so straightforward. It all depends upon the context – the person who is asking, and for what reason.
Fundamentally, your home has three separate price tags. One is based upon its market value, the price you could expect to get if it was sold. The second refers to its replacement value, the price on which your homeowner’s insurance policy is based. The third one speaks to your property tax values or the price the government uses to assess your annual property tax bill. Very rarely do all three prices match, and what’s more, they may even be moving in very separate directions all at the same time. To make things even more complicated, these three values are interrelated, and as a homeowner it’s important to understand all of them.
Property Tax Value
Although property tax values are meant to represent the actual market value of your home, any given home may be taxed by more than one jurisdiction, and each taxing authority will use its own math to calculate the bill. What’s more, value assessments may not keep pace with changes in actual market values. As a taxpayer, you have the right to contest an assessment if it seems too far off base, but keep in mind that certain home improvements could cause your property to be reassessed and result in a larger tax bill down the road.
Replacement Value
Your homeowner’s insurance is meant to help you rebuild your home in the event of a catastrophic loss. It’s based upon construction costs in your region, which don’t necessarily match changes in market values. So the cost of replacing your home could actually be going up at the same time that its market value is declining, and vice versa.
Market Value
This is the price you could reasonably expect a buyer to pay for your home in the current market. It doesn’t matter how much you originally paid for the home; this is the price that the market will bear at the present time. It is also an indicator of how much equity you have in your home – the difference between its market value and how much you still owe on your mortgage. An experienced real estate agent is trained to understand your local area housing market and is the best resource for determining this figure.
The monetary value of your Fairfax County home is an important figure to know even if you’re not thinking of selling. All of us here at the Sullivan Group are happy to help you understand the regional market and what it means for your property. Contact my office at 703-222-3300 or speak with me directly on my cell at 703-268-6380, or by email at csullivanrealty@gmail.com.
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