Property tax consulting

[DTB]

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.


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Not here it isn't.

 

[Carnivore]

Not here it isn't.

Not in my state either, its just one of several ways. One of my CG mentors is the former County Tax Assessor.

Assignments are assignments and one can be intirely different then another.

Bottom line is there is nothing in USPAP preventing an appraiser from providing this type of service.

To your point of risk. OK, I think most of us were already aware of that common fact of being in business.

FTR, none that I could tell were suggesting that we would be performing tax appeal work on a 100 million dollar industrial complex.

Geez, I am a licensed residential appraiser. Pretty much that means I anm confining my work to what I know. Top dollar in my area would be maybe 7 mil. Most appeals will be on homes starting around 500k to 2-3 mil.

 

[Kali the Boston Terrier]

Not in my state either, its just one of several ways. One of my CG mentors is the former County Tax Assessor.

Assignments are assignments and one can be intirely different then another.

Bottom line is there is nothing in USPAP preventing an appraiser from providing this type of service.

To your point of risk. OK, I think most of us were already aware of that common fact of being in business.

FTR, none that I could tell were suggesting that we would be performing tax appeal work on a 100 million dollar industrial complex.

Geez, I am a licensed residential appraiser. Pretty much that means I anm confining my work to what I know. Top dollar in my area would be maybe 7 mil. Most appeals will be on homes starting around 500k to 2-3 mil.

Nor in mine either, but it is always going to be the largest issue. Incorrect property cards and inequitable taxation will only take you so far. Most times it is a moot point.

In regards to your statement you are just a licensed appraiser....my treatment of a $100 million industrial plant and a 1000 SqFt residential home are going to be the same...and have been the same given I have done both for tax appeal. Credibility and character are the same value no matter what you are doing.

USPAP also doesn't say you can't do heart surgery either...but that does not mean it is a smart idea for most of us.

 

[Doug in NC]

Moving past the ethics of advocacy work ... anyone know the process of how the "valuation service" tax advocates operate? I mean, how do you know when to take the appeal assignment or not (and I'm thinking of commercial work here)? If you haven't done an appraisal, how do you know whether to tell the client to proceed or not?

I have a little insight, as I considered working with one company that does tax appeal work among many other cost-saving services. Basically, I don't think they would even consider a case unless a certain high dollar threshold were met. In the event that the minimal dollar value threshold was met, their expert would then review a list of property details to decide if an appeal was worth pursuing.

I looked at the idea of buying into a franchise in the tax appeal business, but these companies want to charge at least 15K as a franchise fee - not counting other necessary costs they estimate to be in the 10K range. I would be willing to scrounge up the fee, but you have no way of knowing that your investment will pay off or not, so I have opted against that idea.

 

[Michigan CG]

...........Bottom line is there is nothing in USPAP preventing an appraiser from providing this type of service.......

The question is what type of service can you provide....and what do you sell to the public as your credentials to do so?

If Joe Schmo says he can help you save taxes the public wants credence and reputation. The credence and reputation is that you are a property value expert in your market because you are an appraiser. But how do you communicate to the public that you can be their advocate without telling the public you are a valuation expert (appraiser)?

In order to get the clients you need to tell the public you are an expert, aka, appraiser. So , now there is a fine line you have to walk because in order to get the business you are telling the public you are an appraiser; appraisers must follow USPAP.

What do you do at the initial consultation? Do you point out assessor errors? The profit margin in that is limited. Do you point out possible valuation errors? That is getting towards valuation services, which is appraisal practice.

The only way I know to provide tax appeal (assessed value) services is to tell the property owner that you will provide a service for them, but you cannot guarantee anything.

The general public is looking for guarantees for the most part, they want to know the $400-$4,000 they are spending will guarantee a decreased tax burden.

... anyone know the process of how the "valuation service" tax advocates operate?......

Many of them make the consumer believe that they will get lower taxes, inferred or implied. They have to make people believe that they will benefit, otherwise the market is limited. The general public does not want to "take a chance" that they will or will not save money.

.........If you haven't done an appraisal, how do you know whether to tell the client to proceed or not?...........

Therein lies the conundrum. You really can't tell someone to proceed if you do not form an opinion of value, high or low. That is acting as an appraiser.

It is my opinion that if you are going to provide any opinion value you have to have a strong engagement letter stating that the client may or may not have a case, and that if they do have a case there is no guarantee that the client will "win" in their efforts.

Tax work can be lucrative, but the rules must be followed, and USPAP is one of those rules. Be an advocate for your appraisal report, not the client; that is USPAP 101.

 

[Carnivore]

Tax work can be lucrative, but the rules must be followed, and USPAP is one of those rules. Be an advocate for your appraisal report, not the client; that is USPAP 101.

Tim,

I have not missed this point, I understand it quite well and I am not suggesting otherwise.

I am trying t get the message across that an appraiser can and really should be offering this type of service. How we do this is all in the SOW while mindful of the lines in USPAP we can not cross.

I have complete several appeals without ever conducting an appraisal. The appeals were based on inequitable taxation and all of them were succesful. In inequitable taxation U used the tax assessors own data againts them. Its always an error on their part and they readily correct those errors.

The tough part of residential appraisers is locating this work. One way is to spot it when it arises during other work. How often has a residential appraiser come across properties with tax's that were high in comparison to the market? I say we all probably see it quite a few time throughout the year and we should attempt to capitalize on eveyone of them.

One way you can check a property for potential appeal candidate is WITHOUT an assignment, pull comparables and see if it is a viable cause. Without an assignment means there has not been any initial contact with the potential client. I know of numerous neighborhoods in my market that homeowners should be appealing when the oppurtunity arises.

So yes, the advocacy is USPAP 101, but its like any of USPAP, its a rule to follow. It is not a rule to run scared of in pursuit of a better business model.

Break the bonds of HVCC/AMC by being unavailable on the days they call with insulting fees and ridiculous turn times. Help create a shortage of appraisers by staying in the business and expanding your horizons.

Good Article: http://www.consumeraffairs.com/news04/2008/10/property_tax.html

This site is great in it shows appraisers the possibilities: http://www.valueappeal.com/demo.aspx

Interesting and useful web sites:

http://realtytimes.com/rtpages/20070111_appealtax.htm

http://www.assessor.com/links.htm

http://www.propertytaxax.com/FAQ.htm

https://secure.lexi.net/ntu.org/main/products.php?did=7

http://www.aptcnet.com/NewsLtr.html

http://www.propertytax.com/types_realestate.cfm

http://www.elliottlaw.com/about/ Read this through very insightful about appraisers

 

[DTB]

How it's typically done in these parts is to pay a small retainer, $50-100. Your "case" gets a look over, if it's a go then you pay zzz for professional services and a percentage of future savings.

Only outlay at risk for consumer is $50-100. Other fees are paid after successful appeal.

No great gamble by the consumer and no free work for practitioner.

Your marketing is the tough and expensive part. It conveys the FIRM'S expertise not YOUR expertise. i.e. our staff has zzz years of R.E., Valuation and legal experience available to help you. What you personally don't have, you can hire out.

Get the appraiser blinders off and think like real businessmen. Good luck on the venture. The S&P is calling me back to their screen.

 

[Doug in NC]

Get the appraiser blinders off and think like real businessmen.

Thanks DTB, that is exactly what I'm trying to do. I can envision making 3-5X my current appraisal income, if I can escape the real and/or perceived boundaries of thinking like the average appraiser. I am sick of letting my talents and education go to waste under the restrictions placed on me by USPAP and a grossly over-supplied appraiser market.

 

[Carnivore]

Doug,

I have an example of the frustration appraisers live under. In North Carolina we have porperty management companies and the principals must be licensed as RE Brokers with the NCRE Commission.

We also have HOA/POA management companies that are not required to be licensed. The NCRE Commission has no authority(just ask them) over the HOA/POA companies as long as the principle in not a licensed RE Broker. If the principle is licensed RE Broker, then the commission by law controls them and includes the HOA/POA management.

So it is easy to see why you think not being licensed as an appraiser in NC is the way to conduct tax appeal work and be a real advocate for the property owner. People in this state and nation do it all the time, look at my links. No appraiser license and no USPAP means mo'money for them. If you need an licensed appraiser then hire one like DTB suggested.

Maybe you should speak with tax attornies and see if they need a researcher with your excellent skills! :icon_idea:

 

[JSmith43]

Maybe USPAP could broaden the SOW and ethics rule so that appraisers could perform an advocacy report and a non-advocacy report as long as the advocacy was prominently disclosed:icon_mrgreen:

Kali, nice word picture about how any possible negative spin would be put on the appraiser's action come face time in court. The initial mission of looking for errors or clues to a potentially high valuation will be convincingly be spun as an agenda driven valuation process.

With that established, the appraiser will be asked if it would not be human nature to seek out evidence to support you initial findings, just like an AGW crusader with a renewable grant:laugh: