Considering tax assessments on the East Side of Providence, RI, we ran across an interesting example of how one can get fouled up when considering the purchase of a home.
Take the example below which is an actual MLS listing description from our realtor MLS. The inputting of this data into MLS feeds all the other national sites, like Zillow.com, Trulia.com and every other listing website out there.
When compared with the official tax assessor’s database, the following discrepencies are noted:
1. MLS says assessment is $899,400 but Tax Assessor’s Database says it is $710,000
2. MLS says square footage is 4,039 but Tax Assessor’s Database says it 3,548. On MLS, it is noted that the “Living Area Source” is from the Tax Assessor. How could that be and does it really matter?
To answer the first question, “how can that be”, is pretty simple in one way and not so simple in another way.
1. The MLS data was entered from the prior year’s assessment which listed 4,039 as the square footage - simple.
2. The Tax Assessor’s square footage changed from 4,039 to 3,548 – not so simple and begging the question:
HEY DUDE, WHO TOOK MY SQUARE FOOTAGE?
According to the tax assessor’s office, here is what most likely happened. As part of the Providence revaluation, properties were measured from the outside around the perimeter. So if there was a square footage error, it was corrected with the new assessment.<
To answer the second question, “does it matter”, of course it does for some very important reasons:
1. To state to obvious – you are getting about 500 less living space than you thought you were.
2. When measuring relative value of comparable properties, buyers and bank appraisers will use sales price per square foot calculation. There is a big difference the real price per square foot (list price 890,000 / 3548) = $250 per square foot and what it looks like in MLS —- LOWER — (list price 890,000/4039) = $220 a square foot.
3. It impacts your property taxes which here on the East Side of Providence are high relative to the rest of the state. Every dollar of a lower assessed value means less in taxes for you.
Moral of the story, do your due diligence. Just because it is in MLS, or Zillow.com or Truila.com does not make it correct. As as one of my college professors was fond of saying “garbage in, garbage out”.