Appraisal For A Tax Appeal

[Mike Garrett RAA]

Maybe I don't want to move to Arkansas if the assessors are that inept!

I, too, served on the Board for three terms, only quit when they wanted to drop the position to part time and pay $25 an hour for actual hours worked. Prior to that we were paid for the full term regardless of actual hours worked.

Your process sounds similiar to ours, all properties are re-valued every two years here and at fair market value.

 

[Terrel L. Shields]

Colorado also has some caveat about the ratio between Commercial property and residential that skewers the tax...$25 an hour! Wow. Jury duty paid more than BOE...I was paid minimum wage plus mileage. Then they decided I and one other guy from the far side of the county was being paid too much mileage (wow....25 cents x 44 miles per day), so they switched to a $5 per day per diem, which wouldn't buy my gas usually. Two of the guys could have strolled to work from their houses. Also, to make us more friendly we had to meet at night and on saturdays to accomodate the public...talk about suck. You got paid $40 for staying from 9:00 am to about 9:00 pm, unless you wanted to drive home just in time to drive back. Then on saturday work about 1 hour ($5)...

 

[Austin]

Don't forget appraisers cannot be advocates for a client. It is against the Ethics Provision. You must handle the assignment outside of USPAP. The only time an appraiser can be an advocate is to defend his own appraisal. I instigated a long thread on this subject about two weeks ago. Look it up and read some of the replies.

 

[Terrel L. Shields]

actually a Colorado Supreme Court decision says that appraisers can charge a contingent fee for tax appeals, so at least 1 state defies USPAP. A BOE challenged an appraisal on that basis. Appraisal Journal noted that a few issues back.

You can charge a flat fee.

But as I stated above, an appraisal is your least viable defense. A consulting service is the ticket and within or outside of USPAP, there is no value issue, nor contingency issue.

 

[Rick Kulman]

I don't know where you are located and if there are any special rules or manuals you have to follow but in most jurisdictions where I have testified it's the appraisers sole responsibility to determine market value as of a specified valuation date.. Here in NJ it's October 1 of the pretax year. Once you determine market value a ratio is typically applied and the proper assessed value is determined.. The assessor is given a corridor of 15% above or below the ratio. If inside the corridor the assessment remains unchanged. You can get an increase or a decrease in assessment.

Know your comparables and verify them with the parties. You will be surprised at what you will find out. Do not rely on any unverified MLS data...it's typically wrong. Don't worry or get involved with any local politics..just be ready to testify again on the same appraisal in a real court in about 1 to 2 years.

Under no circumstances should you compare assessments with other properties.

 

[Terrel L. Shields]

Under no circumstances should you compare assessments with other properties

Actually I had a book somewhere with tapes that described the process of using comparable appraised values. This tax consultant did nothing but tax appraisals in Cal. and NV. In Arkansas, this is one very good way to do it. In one subdivision of condo-duplexes, mostly with older folk living there, the entire subdivision was appraised based upon 1 sale, post-appraisal (sometime between Aug 31 and Jan 1, dated for Jan 1) three other sales occurred that were much less. Several neighbors got together and came as a group. The entire subdivision was lowered. Oh, sure. I heard board members query taxpayers what if we raised everyone else's rate but left yours the same...bullying tactic as i see it....taxpayers are neophytes to the machinations of the assessment process and should not be treated like that.

Also, I took a class with a Missouri tax consultant/appraiser who used that technique. He only appraised commercial properties and he actively sought over-valued properties, then approached the client with a proposition to lower the values. It works.

It sounds like your state has a system whereby assessment cannot be overturned with any sucess. The 5,000± complaintants in my home county in 1997? 91% were lowered....one property was raised (due to an error of 16,000 SF barn being logged as a 1,600 SF barn.)

In our state we contest the appraised value, not the assessment. State Constitution requires all ad valorom appraisals are "Market Value" appraisals. It is easy to see whether a property is over or under appraised. I did a spreadsheet of property I appraised for about 2 years comparing the assessor appraised value vs. the actual sales price of those properties that sold. It was 50%± to 150%± with the average being 105%±....The variance is unacceptable by almost any standard except the government. If the values had been 93% to 115%, It would be more palatable. At least you would think it fair. In fact, in Arkansas taxes cannot rise more than 5% per year regardless the assessed value, but that issue is entirely independent of the Appraised value.

 

[Terry Russell]

Terrel is absolutely corect on the apples and oranges. The USPAP compliant appraisal has no bearing on an assessment for taxation purposes.

But then, Terrel, you go on to state how far off the assessed values are from an "appraised" value. If their is no correlation between the values, then how can one be incorrect, and the other correct?

Please explain your reasoning.

Austin nailed it with "Under no circumstances you you compare assessments with other (appraised) properties.

tr

 

[yvonne dill]

The threads on this subject are great. They also support my early view that this is a very specialized subject and should not be tried alone by the inexperienced. Please read the posts of the men who have years and years (sayeth the old guy) & (poultry king of NW AR) of experience in this the field of appraising.

If a person is hell bent on doing one of these assignments for the first time, do yourself, your license, and the public a favor, get an experienced partner to co-author the report. If the tax board gets even a hint of your inexperience they will rip you a new one.

Too bad with all this good advise, this isn't added to it. Mike Garrett told one poster on an earlier forum that if the poster didn't know the answer to the question the poster asked, to ask his mentor, and if he didn't have one get one. This is especially appropriate here.

Competency Rule. Competency Rule. Competency Rule. Can't be read enough.

 

[Mike Garrett RAA]

While attending the USPAP instructor's course this topic was brought up. An appraiser should not and cannot do a consulting assignment outside of USPAP. Once you are a licensed or certified appraiser you must follow the standards as they apply to consulting.