How often does property tax get reassessed, and why isn't there a California-like limit?

Q: The latest valuation and tax assessment on my home showed an increase, which means I'll be paying more property taxes. How often can property get reassessed, and how often does it get reassessed? Can I expect my taxes to go up annually? Why don't we have something like California's Proposition 13, which stipulates that property values are only reassessed when ownership turns over?

A: By law counties can reassess properties annually, although not all do, explains King County Assessor Scott Noble. Doing so requires resources, something counties must show the state they have before being given the go-ahead. Currently 17 counties assess annually, 20 do so every four years, while one assesses every two years and one every three years. In Western Washington, most counties, including King, Pierce and Kitsap, are on an annual schedule, which Noble considers "the recommended method. It allows for more rapidly appreciating properties to pay their fair share on a more timely basis." Among the exceptions are Snohomish, Jefferson, Mason and Whatcom counties; they're all on a four-year schedule.

Now to whether your taxes will go up every time. Noble says they usually do, but it's not a given. "This depends on the money that both districts and voters lawfully levy in any given year." In 1998, for example, King County property owners saw their property value assessments climb an average of 10 percent, while the average tax bill actually went down. That's because various voter measures expired. Looking ahead, Noble expects "substantial increases" in 2003 property taxes, and again, it's because of voter-approved levies. (Initiative 747, approved by voters last year, limits city and county property-tax growth to 1 percent per year unless voters approve larger levies.)

As for why Washington doesn't have a Proposition 13, Noble says the reason is simple. It's unconstitutional.

Q: My husband and I would like to buy a house, but we have a lot of consumer debt. If we consolidated our debts we'd have more money for our monthly house payments. Would doing a consolidation be a mark on our credit report that would prevent us from buying a house now?

A: The way you consolidate your debts is all-important, says David Hatlen, vice president of HomeStreet Bank. If you have a good payment history, he recommends you apply for your bank's personal line of credit. It's likely to have a lower interest rate than your credit cards, so you can use it to pay off high-interest rate debt and save money at the same time. That won't hurt your ability to purchase a house, nor will a high debt load automatically disqualify you.

In fact it's possible to have more than 50 percent of your gross monthly income go toward all debt (mortgage, credit cards, etc.) and still qualify for a loan, he says. That's if you've maintained a good record of paying at least your minimum card bills each month. "The worst thing is when people skip some payments to concentrate on paying one of them down."

If you're in that boat, you likely won't qualify for a line of credit. So another consolidation option is to go with a nonprofit consumer counseling agency. It will collect one amount from you and disperse it to your creditors. The important thing for you to know: Lenders consider this a "minibankruptcy," Hatlen says, because the agency persuades your creditors to eat part of your debt in return for a guarantee they'll get some money. Information that you're working with the agency will show up on your credit report, and most lenders will require you to have had these debts paid off for two years before granting you a mortgage. Plus you'll have to have established new credit and handled it responsibly.

As for going with a for-profit debt consolidation or credit-cleansing firm, be very, very careful. The Federal Trade Commission cautions that these outfits may not deliver. Go to www.ftc.gov for more information.

Q: Has there been any research on whether it's better to start your home's selling price above value, leaving room for negotiations, or just to start at fair market value? Also, is there a difference in time on the market because of the differences in asking price?

A: The National Association of Realtors does a lot of research, but it's never tackled that one. And Pat Grimm, current board chairman of the Northwest Multiple Listing Service, says he's not heard of any such study. However, Grimm, who's also designated broker for Windermere's Bellevue Commons office, does have an opinion. In general, he thinks sellers are wise to price their home at market value. But that's not a hard and fast rule. Sellers who aren't pressing for a quick sale "can always price it above market value and see if someone will pay, but it's not likely because there's too much information out there." Not only do buyers use ads and the Web to get a handle on neighborhood values, but buyers' agents are only too happy to tell them whether a property is priced correctly, Grimm says.

He cautions that sellers who overprice risk missing their best sales opportunity — the early weeks after a home goes on the market. That's when people flock to see it. A home that's overpriced "gets shopped against other competitively priced homes, and buyers will buy other homes before they'll buy that seller's," Grimm reports. "Buyers are savvy enough to know the difference, and if a property is way overpriced it will sit for a long, long time."

As for leaving yourself negotiating room, Grim says it's not a given that's necessary. "Not everyone feels the need to pay less than the asking price. If they feel the value is there, and it's well priced, people will pay it."

Home Forum answers readers' real-estate questions. Send questions to Home Forum, Seattle Times, P.O. Box 1845, Seattle, WA 98111, or call 206-464-8510 to leave a question on a recorded line. The e-mail address is erhodes@seattletimes.com. Sorry, no personal replies. More columns at www.seattletimes.com/columnists.