HomeMy WebLinkAboutHomeowners guide to mass appraisal1
WASHINGTON STATE DEPARTMENT OF REVENUE
The 39 counties in the State of Washington collectively
perform appraisals on millions of real property parcels
each year for property tax assessment purposes. In order
to accomplish this, most county assessors currently use
mass appraisal methods that analyze properties grouped by similar market influences and characteristics rather
than by performing individual appraisals on each parcel
every year.
Due to the large numbers of properties that need to be
valued each year, individual appraisal of each parcel is
not financially or logistically possible in most assessment
jurisdictions. In addition, this method of appraisal provides
more uniformity in taxation for taxpayers. Because of
greater standardization in the valuation process together
with improved consistency in the work of appraisers,
similar homes in similar neighborhoods should receive
similar market adjustments. The benefit to taxpayers is the
knowledge that they are being treated the same as other
property owners.
All counties in the State of Washington perform annual valuation
In 2009, the Legislature enacted SSB 5368, which provided
that by January 1, 2014, all counties in the State of
Washington will be required to revalue all real property on
an annual basis.
Annual revaluation is intended to result in greater
uniformity and consistency in property tax assessments and a more equal distribution of property taxes among
property owners within a jurisdiction. One of the key
components of annual valuations is the use of the mass
appraisal process instead of a single property appraisal.
Valuation and physical inspection for annual revaluation
There is sometimes confusion between the valuation of a property and the physical inspection of a property.
State law requires that all property be valued annually
and physically inspected at least once every six years.
Property that is not inspected in a given assessment year
is analyzed, and the values are updated through the use of statistics based on annual market data.
Homeowners should let the assessor’s office know of
changes which have occurred to their property, such as
remodeling, additions, or removal of detached structures
from the parcel. This ensures that the assessor’s office has
an accurate property profile from which to determine the
current market value.
Individual appraisal vs. mass appraisal
An individual appraisal requires the use of comparable
sales which are similar to the subject property. For a
valuation analysis of a single subject property, as of a given
date, sales are identified that best represent the subject
property. An example of this is a fee appraisal based on
comparable sales that is typically required by the bank
when a homeowner refinances his loan.
In addition to sales, cost and income information may
also be used to determine assessed value. To accomplish
the task of analyzing thousands of parcels each year
to determine the current market value for assessment
purposes, county assessors utilize a method of appraisal
called “mass appraisal”.
Homeowner’s Guide to
Mass Appraisal
JULY 2024
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WASHINGTON STATE DEPARTMENT OF REVENUE
Mass appraisal is defined as “the systematic appraisal of
groups of properties as of a given date using standardized procedures and statistical testing.”
*It involves analyzing data collected in mass quantities,
developing statistics from the data, and applying the
results to large numbers of properties. Groups of sales are
used to provide value indications for large populations of
properties.
Mass appraisal applies the same appraisal principles as an
individual appraisal, but applies these principles to groups
of properties rather than an individual property. For
example, a mass appraisal may be conducted for a group of properties through analyzing areas that are affected
by similar economic influences, such as homes that are
located near an airport. Another example would be
analyzing similar types of properties, such as good quality
homes over 5,000 square feet in size.
For annual revaluation using mass appraisal techniques,
the assessor statistically analyzes groups of sold properties
to determine the annual update of values. Conducting
annual review and updates to assessed values is required
to ensure assessed values are representative of true and
fair value (market value) as of January 1 of any given year.
State law requires that assessed values reflect 100 percent
of true and fair market value. If the assessor determines
there is a change in value, the property owner will receive
a change of value notice each year.
* Robert J Gloudemans, The Mass Appraisal of Real Property (Chicago:
International Association of Assessing Officers, 1999), 1.
Mass appraisal models
In simple terms, mass appraisal is used to represent and
compare property characteristics that contribute to value
for a group of properties. These may include items such as square footage, quality of construction, lot size, or view.
The value of these characteristics allow for comparisons
and adjustments when there are differences between
properties.
Through the calculation process, the model accounts
for variations between properties included in the mass appraisal of a group of properties.
For example, the condition of a home might be rated
as excellent, good, average, fair, or poor condition. To
represent this in a mass appraisal model, a number is
assigned to those items ranking them from one to five,
with excellent condition being a five.
This allows for property characteristics to be assigned a
value for each of these condition rankings. The chart below
shows an example of the condition ranking and possible
adjustments which might be associated with it.
Other characteristics, which are identified as important
contributors to value, can also be represented in this
manner in order to calculate a total value for each
property. This valuation is compared to the group of
current sales in the same area. Models are “calibrated”
or adjusted to reflect what the sales are indicating in the
market place.
This process of mass appraisal creates a consistent,
uniform methodology for analyzing properties which
is equitable to property owners because all properties
within a category of properties are being treated in the same manner.
The mass appraisal model is tested by statistical
analysis of sales as compared to assessed value of those
sold properties. This includes an analysis of the AS
(Assessment/Sales) ratio of the sales in a geographical
area or property category. This ratio, expressed as a
percentage, is an expression of the level of assessed value
as compared to the current sales price of that property.
For example, a property is assessed at $92,000 and
sold for $100,000. The AS (Assessment/Sales) ratio is expressed as 92,000/100,000 or 92%. The property is
being assessed at 92% of market value. Washington law
requires that property be assessed at 100% of market
Condition Ranking *Dollar
Adjustment
Excellent 5 +$3500
Good 4 +$2000
Average 3 0
Fair 2 -$1000
Poor 1 -$2500
*These amounts are used as examples of adjustments to the base (average
condition) with actual adjustments determined by market analysis.
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WASHINGTON STATE DEPARTMENT OF REVENUE
value. A ratio study indicating a level of assessment at less
than 100% would be an indication that the assessor may
need to statistically update values.
In annual revaluation sales are analyzed as a group and a
single property analysis is no longer performed. Groups of
properties are valued based on the sales and other data in
the market area. These valuations are statistically tested
for accuracy and equity. Individual appraisals are not done
on each individual property.
Counties may provide homeowners with information that includes the neighborhood sales used in the mass
appraisal of their property for that year’s property tax
assessment.
Property owners questions about new assessed values
If a property owner questions their new assessed value,
the first step should include contacting the county assessor’s office to verify that the county records include
the correct information about the owner’s property.
The next step would include reviewing sales and other
information used by the assessor in the mass appraisal
process. The assessor will generally have sales information
available in their office or through a county website.
A property owner may bring recent neighborhood sales
to the attention of the assessor for consideration. The
assessor’s office may review those sales in relation to
their neighborhood sales analysis to confirm that their assessments are within a reasonable range of value
compared to the sales.
Questions
Contact your local county assessor’s office.
Your local county assessor’s office can answer questions
regarding:
• Assessed Values
• Listing Forms
• Exemptions
• Appeals
Contact information can be found on the county
Assessor’s website.
Need more information?
For property tax assistance, call the Property Tax Division
at 360-534-1400.
To request this document in an alternate format, please
complete the Accessibility Request Form or call 360-705-
6705. Teletype (TTY) users please dial 711.
dor.wa.gov
This material is intended for general information purposes and does not
alter or supersede any administrative regulations or rulings issued by the
Department of Revenue.
PT0014 07/24