Earth Sheltered Home: Appraisal And Comparable Problems

[Marant]

Ok, I think this answers my question. This has nothing to do with actually finding a well supported avenue to be able to see what the market value is. This is all about prevailing at a hearing and nothing about just finding the truth out.

If I am properly understanding the 'gist' of your comments, my situation is one that does not have an answer within the appraisal profession? It is not possible to arrive at a market value short of an auction?

 

[George Hatch]

Webbed didn't say that at all. What he said was that if you don't know how to value the property then you're in no position to have an opinion that the assessor's methodology was incorrect. And he noted your personal interest in getting the assessment lowered is obviously driving your questions.

Think about this: There's nobody who has commented in this thread who doesn't have at least 20 years experience at appraising, and some of us appraise a broad range of property types besides houses. The collective exposure to market reactions to atypical properties and various valuation scenarios is considerable.

So when nobody here has expressed any disagreement with the process you described was used by the assessor that should catch your attention. You've been advised to seek a well qualified local appraiser, which is completely appropriate. But don't expect that appraiser to come up with some exotic method of valuation that will return the radically different result because as far as homes go, parts is parts. In most cases, WYSIWYG.

 

[George Hatch]

P.S., if you ever do build another one of these, consider this:

You could have avoided the worst of the solar gain during the summer afternoons by picking one of the vacant parcels on the south side of that golf green and orienting the exposed areas of the house to the north and east instead of the south and west. Add in wider overhangs to provide more shade the way they do to the houses out in the deserts.

And since you were doing so much grading onsite it would have been cheap to add some more trenching to add a horizontal loop geothermal setup to heat/cool the air supply, and then incorporate a couple trombe wall segments to draw that air through the house during the day without using any fans. That would have been cheap, too.

 

[Marant]

P.S., if you ever do build another one of these, consider this:

You could have avoided the worst of the solar gain during the summer afternoons by picking one of the vacant parcels on the south side of that golf green and orienting the exposed areas of the house to the north and east instead of the south and west. Add in wider overhangs to provide more shade the way they do to the houses out in the deserts.

And since you were doing so much grading onsite it would have been cheap to add some more trenching to add a horizontal loop geothermal setup to heat/cool the air supply, and then incorporate a couple trombe wall segments to draw that air through the house during the day without using any fans. That would have been cheap, too.

You are absolutely correct. Unfortunately, when we purchased the lot we lived in OR, where the south side is an advantage. Decided to build later (grandkids), and did not realize just how hot TX summers are.

When I mentioned 'age in place' I was speaking from a personal perspective. Besides, if I were to suggest building another house my DW says it can be much cheaper, because it can be much, much smaller!

 

[Eli]

My question to you would be if you were selling it tomorrow, would you want a premium for the attributes that enticed you to build it? You see the delimma you face in your arguments. Tax people are primarily based on an equitable standard. Market Value is not how tax appeals are primarily won. I’ll give you a good source to call and pick their brain.

Bryan S Reynolds & Associates
270-302-8866

Tax appeals are one of his specialties.

 

[Lee Lansford]

Thank you all for your insights. They are very helpful.

It looks like if I can get the appraisal reduced by at least 25% it would be financially worthwhile to get a private appraisal, particularly since the reduction in value (percentage) should logically carry over to future years.

Unfortunately, it also is clear such an appraisal would be complex and time consuming. Since the hearing will probably be within 30 days it is probably not realistic to expect to have the private appraisal done within that time frame. I am sure any attempt to do so would result in a higher, possibly much, fee, which is understandable. Possibly a better idea to plan for next year and take the time necessary to do it right.

This brings up the question of whether or not to even go to an appeal this year, with only the information I have been able to obtain, which may be insufficient. It might serve only to tip off the appraisal district with no tangible result. I know it is not within this group's purview, but would be interested in any comments as to the best strategy.

Thanks again.

The opinion of Market Value in the appraisal might be of some interest to the assessor, but don't be surprised if it does not change anything. Everyone knows that there is a dearth of data that are truly comparable to your property and what your appraiser will provide by way of such data will likely be no better that what the assessor has to work with. At the end of the day, such facts as size of the house, baths, land size, et certera et cetera in comparison to other houses in the neighborhood will most likely be the determining factor. I might be wrong from my little perch here in Illinois but having some familiarity with the process. Again, not knowing how the local process operates, you might want to place your property for sale--prominently and widely expose to the market--at the assessor's opinion of market value; if there are no offers (such would have to be verified) within, say, 6 months to a years, such MIGHT be cause for the assessor to consider a reduction in the assessed value.

 

[Webbed Feet]

If I am properly understanding the 'gist' of your comments, my situation is one that does not have an answer within the appraisal profession? It is not possible to arrive at a market value short of an auction?

It is highly unlikely that an auction would be representative of the definition of market value used by the taxing authority. An auction has only buyers and no seller, once a successful "bid" is made there is no seller to reject or accept the "offer." Therefore, auctions are probably not market transactions when looked at per the definition of market value that is at play. Also, it is unlikely that auctions would be the typical way residential real estate is bought and sold in most markets, something else that shows auctions in most areas of the country, and at most times, are not market transactions. If 90% or more of all residential real estate in a substantial area, at some point in time, was all being sold by auction, then at that point in time it might be representative of market value.

It is always possible to arrive at an opinion of market value. The catch is, what makes that opinion more or less credible than some other opinion? Clearly, you are being critical of your local taxing authority for having a result from mass appraisal you believe is too high (or you simply have no idea at all what the value of your property is but you just don't like the taxes), yet you have no idea how to go about showing or supporting some other value. If that is the case, how is it the taxing authority is too high?

You need an appraiser that comprehends working outside of secondary mortgage market requirements, understands about definitions of market value that are not preprinted on Fannie Mae reporting forms, understands the taxation system in your location, and understands the use of proxy adjustments. But if it costs you $1,500 plus $150 to $300 per hour for testimony and per diem expenses would you possibly save enough in taxes to justify that? What if you pay that out and do not prevail?

 

[Eli]

PM me and I can give you more very reputable sources. You can shop.