Property tax consulting

[Kali the Boston Terrier]

Hey have fun being the cautionary tale we like to tell at State law classes...fair to assume you do not do much expert testimony?

I'm not saying you cannot be advocate, I'm also not saying that you can't do an appraisal...I'm saying you cannot do both at least for the same client. In my neck of the woods I have tax attorneys that will not use an appraiser if he ever acted as a tax advocate ...ever. There argument is that it confuses the ALJ or tribunal member as to whether the appraiser is acting impartial in this case or is now an advocate.

If you do not see how doing both may be an issue...then that is a far bigger problem for you then what you think you should or should not do. Sometimes the sheep are fenced fir their own protection...sounds like you are just the person USPAP is trying to help

 

[Carnivore]

Hey have fun being the cautionary tale we like to tell at State law classes...fair to assume you do not do much expert testimony?

True, but I wont be the subject of a tale.

I'm not saying you cannot be advocate, I'm also not saying that you can't do an appraisal...I'm saying you cannot do both at least for the same client.

Without further clarification on your part, I fail to see how looking for tax card errors and inequity in taxation compared to your neighbors conflicts with conducting a market value appraisal on the same property. There two distinctly different functions. I suggest that anytime you do an MV appraisal for a property owner(your clinet) for use in property Tax appeal smells of advocacy by default from the Tax assessors point of view.

I dont deny that some would see it the way your saying. I have made a note of that obersvation long before we ever started this participating in this thread. People are often confused.

In my neck of the woods I have tax attorneys that will not use an appraiser if he ever acted as a tax advocate ...ever. There argument is that it confuses the ALJ or tribunal member as to whether the appraiser is acting impartial in this case or is now an advocate.

Now that is an interesting statement. Finding data errors and inequitable treatment is hardly advocating anything other than accuracy and fair treatment. So your telling us that you dont do anything like that on the chance a future client relationship may arise with certain tax attornies in your market?

If you think about it a moment one begins to realize an appraiser looks for these same errors and inequities in the normal course of business on every appraisal valuation service assignment, not just the greater arena of Valuation services where it excludes appraisal valuation services.

If you do not see how doing both may be an issue...then that is a far bigger problem for you then what you think you should or should not do. ...

Its NOT merely a matter of USPAP helping someone like me(or dare I say even you), but more that USPAP exist for all to understand where those lines are actually drawn. SO I get it, that does not mean we should run away from something like this as to risky. Each situation is different.

Years ago many lenders did not engage appraisers who were also RE brokers. Seems like their thinking was similar to yours in that you can not seperate the two or the lines were to blurred. Then as you probably recall, USPAP came along and those internal policies became universal and were spelled out clearly in USPAP which opened the door for a business person to have several services in there business model.

Doug, wants to know how to increase his overall business. I am trying to say that he can do both, appraising and tax work.

Doug knows, like I do, there are lines we can not cross while holding an appraiser license in NC. He seems to be looking for a way to mitigate the risk. I agree with him, its not easy but he can still do both.

What you dont know about Doug is his reputation in the Relocation world of appraising. I would hate to see him give up his license and pursue just tax work. This would be a big loss to the profession in NC. I respect that he does have to do what takes to survive in todays economy. We all are probably hurting in overall business revenue.

 

[DTB]

To be on the safe side, why not do tax appeal work under a different firm name? Avoids any potential confusion and nets the same result for you. Good luck!

 

[The Warrior Monk]

Appraisers that are seen as advocates in this matter are doing a disservice to their clients. Their appraisal work is looked at with suspicion by the assessor, so I'm told.

 

[Doug in NC]

Here we go. This is a perfect example of the confusion amongst appraisers as to how to proceed in this area.

I like the idea of acting as an advocate, with another appraiser performing an appraisal if needed. Since I would like to go after the commercial business, I would need to hire some expertise anyway. I don't fear leaving the "appraisal" business; I believe there is only a dim future for me in the world of lender appraisal. Following the introduction of the HVCC and the proliferation of AMCs, I have near zero desire to continue struggling to rebuild a damaged business in an over-supplied appraiser market.

 

[Carnivore]

Doug,

AO-21 does a pretty good job of explaining advocacy. Doing a great job for a client is a form of advocacy, but not in the context of USPAP.

'kali the whatever' made the broad statement that CYA comments, disclaimers, blah blah are not going to work or cover you butt. OK, she(I assume she) is making a statement that applies to any valuation service we might take on.

But this is what AO-21 is all about; disclosure, openess, desclaimers, notices to readers, transparency all part of ethical and professional behaviour.

What I find most striking about this topic is the ASB has chosen not to even attempt to define in detail Advocacy or Advocate within the definitions section of USPAP.

We have to go outside of USPAP to really understand what we can and can not do and how we must do it. Quite incredible when you think about it.

FAQ 218 actually says something quite specific in the example, the Client wants you to support HER POSITION. That says a lot because now your being asked to create an argument thats not based on facts and and is contrary existing methdologies and practices. So your not just advocating, your advocating in unethical manner, and will be reporting in a misleading way, etc etc.

So it is a SOW issue now. The probable SOW would be an unacceptable assignment condition and unethical for an appraiser to accept.

On the other hand if the potential client ask you to determine if they have cause to appeal is totally different assignment condition. You might do that in the form of a MV appraisal as a comparison to the tax assesors value. The difference might alert you that a real problem may exist in the tax assessors data. Working in the best interest of the client you might advise them that there is strong reason to appeal on certain specific grounds. Then again you might discover that an appeal would expose your client to greater tax burden and your advice in the best interest of the client would be to not appeal.

Remember we have a confidentiality rule we must follow also.

This stuff is pretty complex, but well within the capabilities of a licensed residential appraiser.

Anybody care to comment?

 

[DTB]

Yes, offer ACME Property Tax Appeal to people. If you determine, based on all your worldly experience, that an appraisal is required- hire it out.

Mark up the appraisal cost, represent client on appeal and collect fees based on future client savings.

Forget all the rest of the USPAP stuff, not needed for your potential service(s).

 

[Carnivore]

DTB,

Many of the AMC appraisal request examples I have seen on this forum should be considered advocacy on acceptance base upon the requirements they often dictate! Two comaprables must be within one mile, sold in the last six months.

 

[Kali the Boston Terrier]

Here is the trouble with this niche of the valuation world, it is a litigous environment. Things start out as minor and inconsequential...checking property cards, supplying recent sales, attending hearings. Eventually it escalates to tax court, once it gets there its amazing how the actions at the beginning of the process tend to come back and bite you in the arse. Unlike divorces and other litigation you start with attorneys...and everyone knows where this is going. The other thing about those issues, is that generally the valuation is only one of a bunch of other issues...give a little here, give a little there...compromise. The tax appeal process is based entirely on the valuation. Which means the credibility of the valuation expert is placed at the center of the case. Your actions or your perceived motivations will be the thing debated about entirely, prior to your appraisal.

So before you ever get to the point about what the relevant sales might be, your character or biasness may be well established. Remember the world is not judging you by your intentions, they are judging you by your actions.

You want to review tax cards and pull up relevant sales, fine, but put it in an appraisal report summarizing those points. Find errors in the property card, supply sales...and then do an appraisal report later on down the road. You're just asking for it. Your intentions may be fine, but it could be construed as if your actions at the beginning were less than genuine. I mean how is doing initial work at the beginning of an assignment (i.e. inspecting a tax card and supplying sales) any different than doing comp searches in the lending world without writing an actual report.

I do not make up the rules here, I just do hundreds of these a year and lecture all over the country on this topic...what do I know? But I will say this, spending energy debating "how things should be" will yield very little result...I am just merely stating "how things are" take it how you will. I prefer to start every business venture with my eyes wide open.

'kali the whatever' made the broad statement that CYA comments, disclaimers, blah blah are not going to work or cover you butt. OK, she(I assume she) is making a statement that applies to any valuation service we might take on.

No my dog is a girl (or at least once was) I however am not.

But this is what AO-21 is all about; disclosure, openess, desclaimers, notices to readers, transparency all part of ethical and professional behaviour.

Remember its not what your intentions are, but how your actions are perceived in litigation. Remember the whole reason your client has asked for your help here is to assit them in lowering their taxes...your reputation or perceived reputation will help or hurt that individual before you ever write an appraisal report. Making sure that reputation is crystal clear will ultimately determine your success. Thinking about how that reputation looks. or how you want it to look...is something that is very important to me, and many of my colleagues that specialize in this. I will refuse to work with certian tax attorneys because of their baggage going into an assignment...I do not want their reputation to soil mine. Doing work that could be construed as tax advocacy will do more damage to your business then help it...trust me, people will pay for an appraisal, don't cheapen it by doing a staged assignment.

 

[hglenbetts]

'kali the whatever' made the broad statement that CYA comments, disclaimers, blah blah are not going to work or cover you butt. OK, she(I assume she)

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