For tax purposes

[raquel berrios]

Hi everyone

I have an order from a homeowner who wants a exterior appraisal (2055)
to try to reduce their property taxes, It is a three family dwelling. My question is do i as the appraiser have to supply a operating income statement and can i do an apprasial on a 2055 form for tax purposes. Are there special guidelines when it comes to appraising for tax purposes. Should i only stay in 6 months or should i look in the past year due to declining values?

Thank you so much for your help on this matter

Raquel

 

[Couch Potato]

First, a 2055 (or any other Fannie form) is not appropriate for a tax appraisal. Second, a 2055 is inappropriate for a 3 family dwelling for any appraisal. Third, an exterior appraisal will not hold much weight with a typical tax assessor. Fourth, you need to be sure of the effective date used for the tax valuation, and use the same date. Fifth, you need to be familiar with the grounds for a tax appeal to be successful. You don't do the appraisal with a successful appeal in mind, but you do need to include data relevant to the purpose.

 

[raquel berrios]

Thank you for your informaiton. I only ask for this is my first time coming
across such a situation like this one. Once you have knowledge then you can grow.

 

[Couch Potato]

So true. I enjoy doing tax appraisals. They are a nice change of pace. The appraised values of similar properties are very important if inequity of taxation is one of the ground for appeal. It can be quite a bit of work to check every house if the local data is not easily accessible.

 

[Terrel L. Shields]

A - what date is the value of the assessor? Ours is always Jan. 1, of whatever year it is. So you appeal your tax in AUGUST but the value is JANUARY 1...

B - A narrative or Gen purpose form is best, but having said that...

C - the typical board will consider you a hired gun who is doing the taxpayer's bidding and you will be cooked, fried, and barbequed more than likely.

D - If you do not understand HOW the assessor got to their value,....you probably will not prevail

I NEVER appraise a tax property. I alway rebut the county appraisal. Almost all county appraisals that I have seen are the result of cost related adjustments to some sort of AVM and presented in a cost approach format...(i understand a few will actually used adjusted comparables however)

The most common mistakes they make? Square footage - overstate the condition - Overstate the Quality rating - understate the effective age - If they call it "average" for instance, I might point out that the interior is below average and show pix to prove it. I might point out the roof needs replaced...windows fogged over, etc.

Every 3 years I get into a fight with the county over an old friends 105 year old house. No insulation. Single pane windows. Slate roof is 105 years old...stucco and foundation cracks. etc. And each year they change the QUALITY from Avg to Good (from C to B in their book) Like wine it got better? They ignore the steam boiler in the basement....I show pictures. Effective age? They have shown it as low as 15 years....never mind its age. Etc. That's the way to win in front of a board...An appraisal. As far as a board or assessor is concerned, the homeowner stood over your shoulder and told you what to type.

 

[lizhorvath]

Raquel,
As an appraiser/assessor in Michigan, I can tell you that what Terrel says makes a lot of sense. In Michigan, the assessment day is December 31st. So appraisals specifically for disputing assessments have to be considered as of that day. Also we do a 24 month sales study every year on each style of home within each market "neighborhood".
I know from personal experience that many people don't want the government walking around their home, which leaves us no option but to "guess" what their house is like. Given that necessity, do you think I'm going to "estimate" that the house is a hovel? Or that it's probably pretty nice inside? I might even estimate that it's effective age is a little younger than it would be in average condition. It might be a good idea to find out from the assessor when the last time they had an interior inspection of the property. If it was within the past 5 years, they're probably okay...
My point is, you might want to tell these people that even if they have an appraisal with pictures, if they're not willing to let the assessor's office into the property to see for themselves (sorry folks, but we don't trust every skippy's appraisal out there - my boss requires we see things with our own eyes before we can change anything...) then the board of review might just dismiss their case. Homeowners - You gotta help the board help you.

 

[Don Clark]

Thank you for your informaiton. I only ask for this is my first time coming
across such a situation like this one. Once you have knowledge then you can grow.

You should also check your state law. i believe that New York is one of the states that allows you to appear before the tax appeal board on behalf of a client. But, that is frought with USPAP issues. i suggest you read Standard 4. You might w3ant to seek the services of another appraiser in New York who has done this kind of work.

 

[The Warrior Monk]

I've gone to small claims court regarding such assignments. However, it is in the same capacity as another other assignment in which I appear in court...as an expert witness, and an advocate for the appraisal, not the client.

You have to find out what the date of value is. I personally would not use a lending form for such an assignment, though many appraisers do. In fact, many trying to fight their taxes bring in appraisals prepared for other purposes, such as lending purposes, estate taxation, etc.

Be familiar with your local assessment issues. There may be certain nuances that you have to address.