Property tax consulting

[Doug in NC]

Is appraisal licensing detrimental to those aspiring to become property tax consultants? Considering the state of the fee appraisal industry, I have to wonder if I shouldn't drop my license and become a "valuation advocate". It's sad that the profession with the best qualifications for ad valorem tax consulting, is most discouraged from assisting over-assessed property owners. I have read the legislation affecting tax consultants in NC and appraisers aren't even mentioned, while accountants and attorneys can advocate for taxpayers. I understand the ethics part of providing an unbiased perspective, but it is a travesty that our valuation training seems almost a detriment to performing a service that could be greatly rewarding to both appraiser and taxpayer.

The biggest disadvantage: non-appraisers can offer to assist the taxpayer on a No Risk basis, but appraisers would be accused of ethics violations if they made the same deal (although there are appraisers advertising the same deal on their websites). As an appraiser, if I charge what I consider to be a reasonable fee, instead of a % savings cut as many consultants charge, taxpayers are discouraged from risking paying an appraisal fee. After all, why risk paying 500-1,000 when a non-appraiser gets paid only if they save the taxpayer money.

 

[Pittsburgh Pete]

Have done many appraisals for tax assessment purposes usually in conjunction with an attorney. In our neck of the woods, a change in assessment typically requires an appraisal to support the change. Warms and fuzzy complaints without adequate support (i.e. an appraisal) go nowhere.

My county is currently under a court mandate to reassess all properties to update the current system that relies on a 2002 base year--current values penalize property owners in areas where values have declined. Should be a busy year when the reassessment is completed.

Bottom line, there are plenty of opportunities to practice in this segment of the market. Find an active real estate attorney in need of your services. Establish a "firewall" (kind of like the HVCC) between the attorney and yourself to eliminate any chances of being labeled as an advocate.

I could function as a tax consultant but would still need to retain the services of an unbiased appraiser to make the case for an assessment change. Pick a role, one role and roll with it.

 

[Restrain]

In Texas, you have to be licensed for both. Over the years, I've done this and it can be lucrative. Fee is generally 25% of the taxes saved, no up-front to the client. You don't have to do an appraisal, but provide sufficient support (sales in the neighborhood, etc). Further, commercial M&E, etc is always good.

Find out if there's any specific regs, such as Texas has, and go for it.

 

[Doug in NC]

It depends on the client and the value involved, but I have seen contingency arrangements in the 40-50% of first year savings range. Kicks the sh out of your typical lender and AMC fees.

 

[Carnivore]

Doug,

My greatest success is with finding errors and or inequitable taxation.

You can be a total advocate for them if you stick to just valuation services.

You still might have the option of making an appraisal.

I recently applied for a opening on my County board of equalization. They had one opening but they needed a CG for that particular one to maintain balance. So now I will just be on the tax payers side.

My guess is your area took a beating like mine. So there money to be made.

 

[hglenbetts]

I'm working on a plan for home owners, that is set in stages.

1. Free initial consult with property owner to explain Michigan's 3 tiered tax valuation and explain the public record data sheet. (This may be done at a public invite presentation)

2. For a small fee, review the municipality data card in detail, measure the home and report back. (no discussions of specific property value yet, just checking all data for accuracy and reporting back).

3. At owner's request, perform a complete appraisal (fee in step two credited to total cost).

4. Prepare owner for their 3 minute local appeal.

I'm planning on an engagement letter and work file with #2 and beyond.

Many residential owners give up if denied at the local level due to extremely long wait for the State Tax Tribunal. If they want to press on, then it's time to bring on an attorney.

Any thoughts on my plan??

 

[Michigan CG]

......You can be a total advocate for them if you stick to just valuation services.

You still might have the option of making an appraisal.......

You may only be an advocate for your appraisal, not the homeowner.

I do work for both sides. If you are known to be fair, reasonable and non biased you will have more success. It, in my opinion, is advantageous to have worked for some of the townships because they know that I tell them the truth.

When they get a report from a property owner it holds more credibility than the guy known for creating numbers.

There is a lot of money to be made but it must be done ethically and professionally. The first thing I tell people is I cannot guarantee anything, and my number is the same no matter who I work for. Same thing for legal, divorce etc.

If you start turning in reports that are obviously biased remember that taxing authorities hire appraisers to discredit you...I am one of those appraisers.

 

[Carnivore]

Tim,

I did not make myself very clear. We can be an advocate if we are just doing a valuation service, but not if we are doing appraisal valuation services.

So I can compare their taxes to others and find out why they might be different. I can look for errors, All this I can do on a contingency.

Now an appraisal(having a value as an element) is a different animal and subject to USPAP.

Something like that.

 

[Kali the Boston Terrier]

Advocacy

If they came to you because you are an appraiser, and you are performing the work as an advocate...it does not matter what you say in the form of disclaimers, CYA statements, engagement agreements...the line is too far gray for you to be impartial in the eyes of someone outside the transaction. At this point you have already done damage to the cause without even doing anything wrong per se. If you are going in any way to perform the work as an advocate...contract out the appraisal, I have seen good appraisers reputations' trashed because they were perceived as advocates.

Its a fine line, and you are the not the person who can judge if you crossed it or not. I do a lot of these, and have a new firm speaking to this exact issue...I will not do any of the appraisals this firm generates and will contract 100% of the appraisals outside of my firm...because I am trying to help these people, not hurt them and if it even has a hint of impropriety to it...the taxpayer and your credibility is gone.

 

[Carnivore]

Kali,

The very idea that we can not shed our appraisers hat is ridiculous. I am not running or shying away from legitimate work. Especially since so many non-licensed people do this exact type of work all around the country.

There are several way to conduct this type of work and its all in USPAP in how to deal with the appraiser side of it. If it aint an appaisal then USPAP does not apply, period. USPAP defines an appriasal.

I will take my chances because the risk is low. I know USPAP and I know how not to cross the line.

Your beginning to sound like the Ruth Buzzy Newsletter Gal.

I refuse to be fenced in like a sheep.