1. Welcome to AppraisersForum.com, the premiere online community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Assessed Value Higher That Appraised Value

Discussion in 'General Appraisal Discussion' started by Tim Hicks (Texas), Jun 5, 2003.

Thread Status:
Not open for further replies.
  1. Tim Hicks (Texas)

    Tim Hicks (Texas) Elite Member

    19
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Texas
    I was just curious how many of you live in areas where the assessed value is higher than you can appraise a property. Ten years ago, this never happened. But, for the last few years we have had areas where the tax assessed value is higher than our appraised value. One county (Denton) is consistantly higher in the thriving cities. That is a great phone call to receive. "How can you say my home is worth $xxx,xxx, even the county thinks it is worth more!" "Well, the ten sales of the same plan that sold in your addition in the past six months only reflect my value. We don't let the assessed value affect our outcome." It is to the point that it is not worth appraising in certain cities (Lewisville, etc) even though they are "cookie cutter" because the endless headaches caused by the appraisal district.
     
  2. Dee Dee

    Dee Dee Elite Member

    1
    Jan 16, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    Welcome to my world. :angry:

    Since the last round of assessments it's not uncommon to find county-generated values that are $50,000 to $200,000 OVER what the market would pay for a good number of properties.

    I've done several appraisals for tax appeal purposes over the past few weeks, and can find no logical reasoning for their figures. The smart ones have gone down to the assessor's office to protest, the naive are flattered that the county says they're sitting on a gold mine.

    Most homeowners who believe that their latest assessments are high seem to agree on one thing.....the county has a severe budget deficit right now and they're counting on the dummies to help get them back in the black.
    I agree with them.
     
  3. Tim Hicks (Texas)

    Tim Hicks (Texas) Elite Member

    19
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Texas
    In TX, see if you can figure out who controls the money. A $130,000 house can be assessed for $140,000. However, those guys with the $800,000 house are typically assessed at $450,000 or so. How is that for fair? Pretty much tells you all you need to know, doesn't it.
     
  4. David S. Roberson

    David S. Roberson Senior Member
    Gold Supporting Member

    4
    Jan 16, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Tennessee
    Assessed value is usually higher than market value here too. This was never the case until about two years ago. I didn't know others had the same problem.
     
  5. Austin

    Austin Elite Member

    0
    Jan 16, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Virginia
    Up until this year I never remember appraising a property for less than the tax assessment unless it had been condemned. This year it is happening all of the time. I think there is a reason for this. The national economy is out of balance due to an overabundance of government and a loss of economic base industries due to WTO. Real estate prices are declining and the demand for government services is rising. In Virginia the cities and counties set the real estate tax rates and can set state approved sales tax up to a limit but these are the only local sources of funding they have. The bottom line is this: Local government cost are going up because of political pressure, the only significant allowable method of raising taxes is real estate taxes, market prices are declining due to an economic downturn resulting in tax assessments exceeding market value.
    I don’t know if anybody has noticed it but the US Government is manipulating the value of the dollar in relation to a lot of major currencies. This is generally considered to be an act of desperation for 3rd World countries in economic trouble. For various and sundry reasons, I think it is a good idea because it essentially undermines the power of the WTO. The Bush tax cuts undermine the political options of the Democrats. Some one in the Bush government has their thinking cap on. They are representing the best interest of the good old USA and showing no concern for the World government commonly known as the UN. :yellowblack:
     
  6. Bobby Bucks

    Bobby Bucks Elite Member

    44
    Jan 27, 2002
    Professional Status:
    Real Estate Agent or Broker
    State:
    North Dakota
    Austin we can thank Karl Rowe for that. I think it's great that presidents can only serve 2 terms, but Rowe can serve for another 40 years. I love it. :)
     
  7. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    9
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    Colorado is faced with a proposition 13 type situation whereby the powers to be cannot raise taxes without a vote of the people. For that reason most taxing levels, ie, county and state have severe budgetary short falls. In order to make up for that assessments have increased. I just did an appeal appraisal for an attorney and it came in $50,000 below (25%) the assessed value.

    Until recently, the assessed values were always below the market. Now they are above. One thing to remember here is that the base year period is January 2001 to June 2002. The market was better in some areas than now...such as Dee Dee's area.
     
  8. walt kirk

    walt kirk Guest

    Most tax assessments are based on mass appraisal data and some on AVM models and computer generated estimates. At their best these assessments are only fair in quality. These mass systems are not designed to deal local situations or declining markets.

    The good part of this is that the demand for tax appeals and appraisals to support the appeals increases. This situation is a marketing opportunity.
     
  9. Austin

    Austin Elite Member

    0
    Jan 16, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Virginia
    Tax assessments are a complicated subject. What is their definition of market value? I have had this discussion with the local tax assessor for years. The tax bill says “market value” but their definition could not be the same as the market value we use. Is that misleading or what? Their method of assessing value use to be to do the cost approach as of the date of assessment, which could have been five years ago and supported with depreciation estimated based on some sale data. Recently I have seen them use the most recent sale price as the assessed value. My conclusion is that they are under orders to wring every penny out of the pocket of the property owner that they can to keep the bureaucracy’s lifeblood, $$$, flowing. It has always been my view that the assessed value was not relevant for tax assessment purposes but the important thing was the pecking order. For example, I could pick one basic type house that sold arms length and use that as the model for the neighborhood. If the model is sold for $100,000, just take the regression equation for that house and apply the variables to the entire neighborhood. The regression equation would be something like: GLA =$50/sf; carport= $10/sf; fire place= $3,000, deck= $9/sf. That way each house would be ranked in relation to the model home and equity would be achieved. Then apply the mil rate to the relative property value and the actual value is not significant. To include condition of property in assessed value punishes people that keep their property in good condition and rewards people that don’t, so I would appraise to the market trend line.
    When I was in the Army on Okinawa around 1970, I had a buddy that rented a house off post. It was nice concrete block house but it was nasty. My buddy asked how much the rent was and the Okinawan landlord said $125/mo. My buddy said “can I clean the place up and paint it at my expense?” The landlord said, “Sure but if you do the rent will go up accordingly.” The end result was my buddy, like his neighbors, lived in a nasty house to keep the rent payments down. Didn’t make sense to me but I guess that is why I have never been conquered and ended up as a ward of another nation like the Okinawans did. It is all a state of mind I guess.
     
  10. Restrain

    Restrain Elite Member

    7
    Jan 22, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    Tim: The Versialles reproduction up here in Denton County that they are asking $45M for is on the tax roll at $10M.

    Yes, both Denton and Collin Counties are excessively valued. What's bad is the outlying counties are following suit. However, it's mostly newer homes built in the last 2 years or custom jobs. The older homes are still at or below market.

    Roger
     
Thread Status:
Not open for further replies.

Share This Page