Property tax consulting

[JSmith43]

.wouldn't it seem odd that you initially were advocating for them in finding errors to reduce their property taxes, then you became an unbiased observer of the market

"Well, actually, I got a written agreement from the customer that paid me for the fact finding mission and he agreed in advance that if I found factual errors that might benefit the tax collector, that they would be shared with the tax collector. I don't get much business, but I am unbiased to a fault."

Kali, excellent presentation. Readers would be hard pressed to get a better explanation from a well compensated instructor. You aren't going to bill us, right?

 

[Doug in NC]

Cali, I understand what you are saying. If you hold an appraisal license, it is a very thin line you have to walk in the tax appeal business. Your insight is appreciated. We, as "appraisers", are defensive because we are the best qualified to do this work, yet others without our level of training and governmental restraints are given greater freedom to profit in this realm. Still, there is great potential to profit in the tax appeal business, as long as we wear either the advocate or appraiser hat, but not both. A similar situation arises for appraisers who are also real estate agents.

 

[Kali the Boston Terrier]

"Well, actually, I got a written agreement from the customer that paid me for the fact finding mission and he agreed in advance that if I found factual errors that might benefit the tax collector, that they would be shared with the tax collector. I don't get much business, but I am unbiased to a fault."

Kali, excellent presentation. Readers would be hard pressed to get a better explanation from a well compensated instructor. You aren't going to bill us, right?

Why is someone paying?

I understand everyone's frustration, I feel it to...recently I did a large industrial property, my appraisal, the thing that carried the day lowered the asessment nearly $9mm, resulting in a 1 year tax savings of somewhere over $350k. I am confident to this day that my reputation carried the day, and the contents of my appraisal report framed in that view...is what worked. I made an appraisal fee that was pretty decent...the tax attorney made 1/3 of the tax savings.

Could I have done the work of a tax attorney, most definetely, I am competent, knowledgeable...but the real question is would I have been able to have the same results for that client had I already worked as a tax agent prior in other assignments...doubtful.

Being an appraiser is not the most lucrative field as of recent, and there are definetely skill sets that we learn that could easily make us money in other sectors. The trick is to make sure you try not be everything to everyone...do tax advocate work, just not tax appraisals. You can still be an appraiser, you just get into a lot of trouble when you try to be both.

 

[Michigan CG]

.......Your clients success is going to be based on your relationships with assessors, ALJs, judges, attorneys. Your relationships with these people will be based on your reputation...which will be based on how you are perceived by people as being an advocate or unbiased.......

Anyone who does tax appeal work should read this again.

It looks as though I might be doing a tax appeal for......an assessor who lives in a different township than they assess in. I also just got an assignment from an assessor for her parent's estate.

Reputation is a huge part of this work, the better your reputation, the better your business gets.

 

[Pittsburgh Pete]

Got a call today from an attorney for a tax appeal. The municipality is getting an appraisal and the attorney sensed an appeal coming. He called me because the boards that hear appeals respect me as I've never tried to push or lowball a valuation. They respect my work and listen to what I have to say as I prepare a reasonable, well supported report. Reputation will get you more work than web advertising or any other method used to get your name out there. Forget getting the name out there, get your reputation out there.

 

[Wolverinefan]

Quite the contrary, I see you have not read the whole thread...tax appeal work is fine provided it is purely an appraisal or purely an advocate. Checking errors on property cards, depreciation factors, GLA...is fine in the context of doing an appraisal. Testifying to your appraisal in tax court is fine. Where appraisers run into issues, is when they find errors in the property card, or depreciation factors...then later do an appraisal.

The beginning work of just checking for errors, pulling sales...etc is often looked at as advocacy work...to later do an appraisal report, would seem a conflict of interest. A fun question that tax attorneys like to say or assessors when later arguing about the appraisal...

"...so Kali the client initially contacted you about helping them with a tax appeal...yes that is correct...what did you do for them...well initially I observed the property and got a copy of the property card...were you doing an appraisal...no I was checking the card for factual errors in GLA, depreciation site size, site valuation...oh so you started looking for problems in the property card...no, just checking the facts...well it would seem that really they asked to look for problems, did they ask you to look at the assessed value too....yes, but that was a different assignment....really, was this when you were looking for factual errors or after...after...how soon after...immediately following the property card assignment...so let me get this straight you were looking for problems before when they hired you, you completed that assignment looking for problems then became unbiased when looking for sales...yes...wouldn't it seem odd that you initially were advocating for them in finding errors to reduce their property taxes, then you became an unbiased observer of the market, don't you stand to make more money in this business dealing if you write an appraisal too...yes...so you have incentive to maybe pick lower sales to make sure you get the assignment...no I am bound by USPAP that does not allow me...were you bound by USPAP when they initially hired you...no...were you not an appraiser then too...well yes...why not...because I was not doing....and on and on it goes

Carni USPAP is the minimum standard you perform work under, not the highest standard...I have not gotten to where I am doing the minimum. Stating that USPAP is the only threshold one should meet is counterproductive to our profession. Your clients success is going to be based on your relationships with assessors, ALJs, judges, attorneys. Your relationships with these people will be based on your reputation...which will be based on how you are perceived by people as being an advocate or unbiased. Its cold comfort to know you are right via USPAP...especially given appraisers are the only ones who read it. I'm sure your client will sleep better at night paying more in taxes, because you are right via USPAP.

Well said! Thanks for clarifying for me....

 

[Carnivore]

Got a call today from an attorney for a tax appeal. The municipality is getting an appraisal and the attorney sensed an appeal coming. He called me because the boards that hear appeals respect me as I've never tried to push or lowball a valuation. They respect my work and listen to what I have to say as I prepare a reasonable, well supported report. Reputation will get you more work than web advertising or any other method used to get your name out there. Forget getting the name out there, get your reputation out there.

Yes, that is something anyone should be able to understand. I do get what Brian's been saying. I dont disagree with him on the fundamentals and certainly agree with him that a best business pratices is the way to operate. That is the root of the problem. The minimum standards USPAP actually allow an appraiser to provide both services even within the same assignment. Brian says an appraiser can not do both and be perceived as credible in either service. I have to defer to his superior experience and agree with him. He has raised the standards bar by not having both types of services within one assignment in his practice. This shields him somewhat from that scrutiny, although not totally, because as a group are credibility is always being attacked.

This has been a great educational thread. Doug, our fellow forum member is looking for ways to survive in this bad economy without compromising his core beliefs. I think he can keep his RE Appraiser license and be a Tax Appeal Advocate. I see his problem as one of building a brick wall between both practices. Thats an administrative action. Two distinctly different companies is the only way to go if he wants to keep his appraiser license.

This thread is about survival in this economy without compromising professional ethics.

 

[ETex2]

I've been doing both for many years. Back in the '80s and '90s, I took plenty of AI courses taught by MAI's who just came right out and stated that appraisers can NOT do tax appeal work. Here in Texas, we aren't really called "advocates", but "consultants" (wink). I always tell the appraisal district rep (an appraiser) up front that I have NOT done an appraisal, that my statements should NOT be taken as an appraisal, and that I am working here strictly as a consultant with a contingent fee. There are tons of local appraisers who do this here in Texas, and they have no problem with it. I've also never heard of any tax attorney who would never use an appraiser that also did tax consulting. In fact, one just hired me to do an appraisal that will be used in a tax appeal.

As long as you do not hold yourself out to the assessor or appraisal district as having done an appraisal, and that you are working on a contingent fee basis, and you are completely upfront with your client as well, I don't see any problem with it whatsoever. I also don't see that marketing yourself to potential clients as an appraiser that also does contingent fee tax appeal work is a problem. Who can better understand complex appraisal issues better - a tax consultant with no appraisal experience, or a seasoned appraiser? This is esp. true with commercial properties. As long as the consultant is up front and honest, and attempts to deceive no one, there shouldn't be a problem.

 

[JSmith43]

Good post, Steve. I have sympathy with Kali's read on the current environment. But, like you, don't think wearing different hats should be a problem as long as it is clearly labeled and as long as the time frame is concisely identified, when one hat is worn rather than the other.

Much of the confusion could be cleared up, to the benefit of the general public and the credibility of the profession, if the ASB would elevate the status of an appraisal by requiring a formalized birthing ceremony.

An appraisal deserves the distinction, if it is going to get some respect. Simply define an appraisal as an event requiring certification of birth via the pronouncement that it is indeed an opinion of value put forth by a licensed/certified appraiser and meets or exceeds minimum appraisal development and reporting standards. Thusly sworn to and signature affixed by the appraiser, it is thereby born, and it's file sealed away for 5+ years only to be reviewed as necessary.