Fee structure for tax appeals

[cwbenton]

anyone have any insight on fee structure for tax appeals. I understand that sometimes the fee can be structured as a % of the tax savings. Granted the appraiser would have to be clear that they are acting as a consultant and not an unbiased appraiser and are acting on behalf of the client.

Thanks.

 

[Pittsburgh Pete]

If you are not functioning as an appraiser, a percentage of the annual tax savings is typical (30-50%). In order to pull off such a maneuver, you may have to hire an appraiser. Don't know of any tax body that will reduce the assessment without an appraisal to substantiate the market value. As a result, you may make more than you might as an appraiser but it is also possible that you'll lose money if the reduction is small and doesn't cover the appraiser's fee.

Have done hundreds (okay, maybe not quite that many) appraisals for tax appeals and quote my fee based on the difficulty of the assignment, just as I would quote any other job. But in each and every instance I functioned only as an appraiser, working for either the property owner or their attorney. My fee was my fee, reduction or no reduction. That whole "contingent fee" thing, ya know!

 

[CANative]

A pro forma works. So does an email with a bunch of comps and a funky income approach along with income/expense statements, rent rolls, Scheule E's, etc.

 

[Pittsburgh Pete]

A pro forma works. So does an email with a bunch of comps and a funky income approach along with income/expense statements, rent rolls, Scheule E's, etc.

In PA only two classes of people can attest to value: property owners and expert witnesses (i.e. appraisers). For an appraiser to drag in what you outline he would be functioning as an appraiser and would not be able to get a portion of the tax savings as that would represent receiving a contingent fee. Get anywhere near a value and you're an appraiser and unable to collect a contingent fee.

One could feed the property owner this info and allow them to plead his case on his own but that strikes me as risky. Best to function as an appraiser (stifle the greedy impulse to rake in the big bucks tied to a percentage of the tax savings) and present your valuation to the taxing body

 

[Atlanta CG]

Saved a homeowneer $39,000 on a tax appeal a couple of years ago. Just got an appraisal fee out of it. Substantial but not like a % would have. Never thought it would be so successful. But, sometimes a bird in hand.......

 

[Pittsburgh Pete]

Saved a homeowneer $39,000 on a tax appeal a couple of years ago. Just got an appraisal fee out of it. Substantial but not like a % would have. Never thought it would be so successful. But, sometimes a bird in hand.......

that would have to have been one grossly over assessed property! Based on our local taxes that would represent a reduction of nearly $1.5M. Have had commercial appeals with more substantial reductions but the appraisal fee is all I walked away with.

Well done!

 

[CANative]

I saved a property owner $5.5mm last month (value reduction). Million dollar reductions are routine now.

 

[jnordquist]

This is an actual solicitation email I received from a very part time appraiser/full time R.E. Broker. I emailed the guy and told him he should think about changing his welcome letter.


Dear :

If you would like our services to perform the Tax Assessment Appeal process for your property. We will file the necessary documents and attend the hearing to try to obtain a reduction in your real estate taxes.

If you would like our firm to represent you, please call for our Contingent Fee Agreement.
Once the Contingent Fee Agreement and the Allegheny county forms are received, we will start the appeal process. The deadline for filing the appeal is March 31, 2010, so we would need agreement before then.

Should you have any questions, please feel free to contact this office.

Thank You

 

[CANative]

What a dumkopf!

 

[Pittsburgh Pete]

This is an actual solicitation email I received from a very part time appraiser/full time R.E. Broker. I emailed the guy and told him he should think about changing his welcome letter.


Dear :

If you would like our services to perform the Tax Assessment Appeal process for your property. We will file the necessary documents and attend the hearing to try to obtain a reduction in your real estate taxes.

If you would like our firm to represent you, please call for our Contingent Fee Agreement.
Once the Contingent Fee Agreement and the Allegheny county forms are received, we will start the appeal process. The deadline for filing the appeal is March 31, 2010, so we would need agreement before then.

Should you have any questions, please feel free to contact this office.

Thank You

May be an idiot, may not. Depends on how he approaches it. Some firms file the appeal, hire an appraiser, and attend the hearing. He doesn't indicate that he will perform and appraisal but will merely "represent" the owner. I've had situations where I've represented the property owner insofar as I'm the only one attending the hearing--the property owner doesn't want to be bothered attending. I make it clear to the hearing officer or board of view, however, that I'm not representing the owner as an advocate but merely appearing to present my appraisal on the property owner's behalf. In Allegheny Co. you need the owner to sign a form indicating that you are appearing on his behalf.

Have only lost one tax appeal in all the years I've done them and that was one of the few times that I performed the appraisal for the taxing body (i.e. a school district)--still see the attorney at volleyball tournaments and still haven't told him that that was my one loss. Go figure!