What is interesting is that Lot #2 is the one with the house on it. Here's what the house is like:

• Built in 1940
• Given an A+ grade by the county assessor (for what it's worth)
• 10 rooms
• 5 bedrooms
• 4 baths
• 5 (count 'em) fireplaces
• 5,594 square feet total
• Full basement (not figured into the 5,594 square feet)
• Central air conditioning
• Heat pump

In 1995 the county valued the house without the land at $289,500. The value of the land as shown above is $3,900. (Why that 9.6 acres is valued at $3,900 when Lot 1, which is 9.88 acres and located right next to Lot #2, is valued at $5,300 is beyond me, but that's a tale for another day.) Therefore the value assigned to the house and the land on which it sits is $293,400. Compare this to my property:

I recently sent a letter to Mr. Santoro asking him how the parcel of land that the home of The Really Fortunate sits on could possibly be in farm assessment. Mr. Santoro wrote back and stated that he didn't agree with that, but that Pennsylvania says it's OK. You can read his letter here. I blacked out the information in the letter as to who owns the property to save the owners the embarassment. (Attorneys call this "redacting" information.)

In summary, The Really Fortunate live in the same "Valuation Neighborhood" that I do on a gorgeous piece of property which is more than nine times the size of mine, their house is 2,167 square feet or 63% bigger and graded slightly better by the county than mine, they have two more rooms which are the bedroom and bathroom, they have 4 more fireplaces and they pay 15.5% less in property taxes even though they paid 4.29 times as much for the property. What's not to love?

Footnote: A newspaper reporter once asked The Really Fortunate owner, relative to the information in the table above, questions about the county's valuation of the property versus the purchase price. The response was, "No comment." I guess!

Another Great Example of a System that doesn't work

This Historic Property is located in Lower Saucon Township. The house was built in 1790 and retains much of its colonial flavor and charm. The house was purchased in 1993 with its 5.88 acres for $332,500 yet when the 1995 Northampton County reassessment was completed the Historic Property was assigned a value of $250,500.

The 5.88-acre lot with 400' of frontage was valued at $88,600 even though it was located in a prime area that came to be surrounded by a development of homes. The homes immediately adjacent to the Historic Property each came with roughly .6 acres of land, the value of the land for each of those properties averages about $80,000.

There is a property, #11 in the table above, literally around the corner from the Historic Property that is 11.22 acres in size and has an old stone home on it too. The home itself is 5% smaller than the home on the Historic Property and is valued somewhat less. The 11.22 acres by themselves are valued at $297,600 however and lie almost completely in the flood plain. The Historic Property does not.

In June of 2002 the owner of a 2.01-acre lot adjacent to the 5.88-acre Historic Property offered to purchase some of the 5.88 acres. A deal was struck and .97 acres of land without any frontage was sold for $45,000. As a result of the sale, county personnel revalued the Historic Property at $244,100. The adjacent lot which is now 2.98 acres in size is valued at $62,800 even though 1/3 of it was just purchased for $45,000. This is in contrast to a 1.99-acre steep lot again just around the corner which was purchased in April of 2000 for $135,000 and valued at $75,000. Now that there's a house on it the lot is valued at $149,700.

The only reason that I am aware of the sale of the .97 acres of land for $45,000 is because I am friends with the seller. You have to wonder how many other similar transactions and revaluations that occur throughout the state go completely unnoticed.

Epilogue: The Historic Property which was revalued by the county in the fall of 2002 at $244,100 was sold in December of 2002 for $635,000.

Why the System doesn't work

As I said earlier, I have no particular qualifications to write about this situation other than the long and tiring and nasty experience of having to deal with it for more than two years. But it doesn't take too long once your immersed in it to realize that there are too many potential pitfalls built into the system for it to ever be implemented fairly. This is true, of course, with any complicated assessment program that might be put into place. But the one being employed now clearly favors the wealthy minority and that same minority controls much of what happens in the state. Furthermore, even when the inequities in the system are brought to the attention of county officials who freely admit that the system is unfair, those same officials don't try to fix what they can of it!

• 1 - The system is not really based on Fair Market Value (FMV). - Almost without exception when I discuss the assessment boondoggle with someone for the first time they say, "I thought my property taxes were based on what I paid for my house!" Well they are more or less, at least sometimes, depending on what various government entities have to say about it. If you want to see how various states determine FMV, click here.
  • In Pennsylvania Fair Market Value or market value was defined by the court for us. In the decision Buhl Foundation v. Board of Property Assessment, 407 Pa. 567, 180 A.2d 900 (1962) the court stated: "Market value is defined as the price which a purchaser, willing, but not obliged to buy, would pay an owner, willing, but not obliged to sell, taking into consideration all uses to which the property is adopted and might in reason be applied." The courts have also said that FMV as determined above is not the only factor taken into consideration when assessors determine a value for a property.

    When a property has changed hands in Northampton County, and I imagine in other counties too, the buyers and sellers are both sent a form to complete and return. The form asks questions about the circumstances of the sale of the property such as were furniture or fixtures included, etc. One of the reasons is to find out if anything other than the land and improvements themselves was sold, or if there were other circumstances that might have affected the price such as financing held by the seller, etc.

    In our case the deal was a straightforward sale of the house and land with no unusual contingencies. Given that, and the fact that the house had been on the market for more than 18 months, one would think that we paid Fair Market Value for it, but apparently not. I wrote to the county asking about our $315,000 purchase price and their valuation of $347,300 and what might be done about it. I didn't hear anything for five weeks. Then I called the courthouse and eventually was connected with Mr. Santoro. He told me that our property was indeed worth $347,300 and that we had just gotten a good deal. I then asked him why the property next to ours had just been purchased for $559,000 even though the county had it valued at $444,400. Mr. Santoro told me that the buyers "had paid too much. Buying a home is an emotional decision you know." Amazing.

• 2 - The county's data does not tell the whole story. - In the Northampton County Tax Records Web Site there are many things you can find out about each of the properties within the county. There are dozens of bits of data for every one including the size of the lot, the square footage of the house, the number of rooms, the number of bathrooms, etc., good stuff and plenty of it, and that's great.

• Just as the realtors wisely don't rely on the county's valuation data when appraising a property, they do quite a bit more when they research the price at which a property should be marketed. Sure they use the sales prices of comparable properties (comps) in the area, but they also visit the property and spend time going through it examining everything in detail. If the realtor is a good one he or she will spend a good amount of time evaluating everything about the home and going over the comps considering current market conditions, etc..

  When you are interested in purchasing a home one of the first things you do is get your hands on an information sheet for the property. This is something that realtors provide that usually gives all the nuts and bolts data for the property and many times this data comes from county records. The date the present owners bought the property will be there, the assessment, the size of the lot, the taxes, the number of rooms and their dimensions, all the usual stuff.

  But you don't sit there is your realtor's office and make a decision to buy a house based on the data sheet and a few words from the realtor, you go see the property yourself! That's because the raw statistics don't tell the whole story and this is one of the big reasons why the present system doesn't work. The desirability of a property is certainly based in part on the foundation of the basic statistics, but there are countless reasons why a property may or may not appeal to someone, those reasons may not even be apparent to the buyer.

As a potential home buyer you go to visit a property to see if it's appealing. You should already know that the basic necessities are there for your family because otherwise it wouldn't make any sense to buy the property. So you're really going to see the property to find out if it appeals to you on an emotional level. Listed below are only a few of the countless factors for any property, which could enter into your consideration to purchase. You will never find any of these in the county's assessment data.

• The house is on a very busy road and pulling out could be suicide.
• The property across the street is a swamp and it stinks.
• The siren for the fire company is on a telephone pole 100' away.
• The firehouse is just down the street and fire engines scream by at all hours.
• The property you are interested is low lying and always wet. Mosquitos abound.
• The property is downwind of a factory that routinely emits foul odors.
• The property is downwind of a sewage treatment plant.
• The property is two blocks from an automotive garage and the customers' cars are always parked in front of the house.
• There is a commuter rail line that goes behind the house.
• The house next door has been poorly maintained and the property is littered with debris.
• There is not a single shade tree on the property since just two years ago it was a cornfield.
• The neighbors have pigs.
• The neighbors are pigs.
• The foundation of the house needs to be repointed or is cracked.
• The basement is wet from a high water table.
• The basement ceiling is only 5' high because the house was built in 1776.
• The basement floor is dirt.
• The first floor joists, the basement ceiling beams, are infested with powder post beetles.
• Mushrooms are growing on the ceiling beams which are damp from the sweating walls.
• The wires in the home are still run with "knob and tube."
• Some of the pipes in the house are lead.
• An entire civilization of rats inhabit the crawlspace under the living room.
• The kitchen hasn't been updated since the Beatles first appeared on Ed Sullivan.
• The bathrooms were last renovated when a luxury car cost $2500 brand new.
• The floorboards need to be replaced.
• The entire house need repainting.
• The roof needs to be replaced.
• Flying squirrels control the attic.
• Etc.
• And last, but not least, the township in which the property is located has fallen victim to well-heeled and predatory developers who have gotten approvals to build hundreds of houses on every last square foot of open space. The schools in the township are already at capacity and the children who will be moving into the developers' boring tract housing will need classroom space and teachers. Property taxes will skyrocket over the next few years. (More on this here.)
• 3 - No one is perfectly competent or honest. - What causes a tax assessor to reassess a property? Usually it's notification by an official from the municipality wherein the property exists. The township knows that improvements have been made to the dwelling or land because the owner has applied for permits. Or has he/she?

  How many homeowners who have installed a new vanity in a bathroom or finished an area in their basement into a room actually applied for a permit? I don't know the answer, but I know it's not every homeowner and for the sake of this discussion that's all we need. Handy homeowners, especially with a Home Depot or Lowes nearby, can completely remodel the inside of their home and maybe even the outside without the municipality they reside in ever knowing about it. Many of the detracting factors listed above can easily be remedied and hence the value of the properly is greatly increased. If the municipality is unaware that a home has been partially or completely remodeled, so is the county. Am I suggesting that government officials be allowed to come into our homes at any time and examine everything? Absolutely not. The tentacles of Big Government already have a choke hold on our lives.

  Even if a homeowner does everything by the book and gets all the permits, who's to say that the municipal officials follow up properly and notify the county? Who's to say that even if the county gets wind of some improvements that the tax assessor will actually show up to reassess the property? Who's to say that even if the assessor does show up that he or she will measure and calculate everything correctly? If you want to read a real nasty (and perhaps typical) story of Northampton County property assessment nonfeasance, check THIS out.

  Aside from what might happen to the house itself, what of landscaping, which generally requires no permits? How much nicer is a property that has some well placed trees and gardens compared to that same property done completely in grass?

• 4 - The County has no compelling interest in the value of a property. - According to Mr. Santoro there are roughly 110,000 properties in Northampton County. Eight tax assessors are responsible for determining the valuations and the resulting assessments for all of those properties. That's roughly 14,000 properties for each assessor. Each and every property has a number associated with it and that's how the assessors relate to the properties.

  Do the assessors really care about any particular one of those properties? Not likely unless of course it is their own. Does it make any difference to the assessors if a property is valued at $40,000 or $4,000,000? No. Do the assessors really care if a particular home has granite countertops in the kitchen or skylights in the bedroom or a deck and a jacuzzi? No. All they are concerned about is that each property has some kind of valuation so the county and municipality and all the other taxing agencies can tax it. Period. That's it. End of story.

  Does the potential buyer or seller of a property care about its value? You're damn right they do. They care the most. The buyers, especially the first-time buyers, are about to make what is probably the most important investment of their lives. The sellers are about to sell their home, which psychologists will tell you is one of life's most stressful events.

  Why is it so difficult for county government personnel to accept the concept that the very parties to whom the value of a property is most important are the ones who really determine its worth?

• 5 - County personnel, in the end, basically answer to no one. Ultimately they answer to the state, but until Pennsylvania legislators really get serious about solving this problem county personnel will continue to pass the buck to "Harrisburg" and nothing will be accomplished.