It’s the time of year when you always wonder why you didn’t pay your property taxes along with your monthly mortgage payment. The idea of keeping the money in the bank and earning interest sounds great, but actually doing it is another matter.
That huge figure at the bottom of the assessor’s coupon statement adjacent to the bold-face words "KEEP THIS PORTION" could have been chopped into 12 pieces that now sound affordable, and whisked away each month with your principal and interest, taxes and insurance payment, commonly known as "PITI."
While I was mulling over the thought of how I was going to produce my first-half tax payment, we were contacted by a real estate appraiser who said our property valuation was too high. He offered to represent us before the County Board of Equalization, said he had a good track record in previous appeal cases, and stated he could get the valuation significantly reduced.
The charge for this was 50 percent of the tax savings for the next two years, estimated at $800. He wanted a $300 retainer, which would be subtracted from his total.
It hit me that the caller’s service was a creative idea for an appraiser who has seen his industry significantly altered by computerized, streamlined appraisals that are now done "in house" by some of the nation’s biggest lenders.
A complicated, "multiple regressive analysis" program, which charts how a home has appreciated, coupled with previous assessed values, often is the basis for a lender’s valuation.
So, it seemed palatable to pay a professional property appraiser $800 for a tax savings that may extend for years. In fact, the concept probably would be appealing to the average consumer who wants nothing to do with fighting city — or county — hall.
The fee could be a bargain given the time and preparation it would take most taxpayers to compile and present such a case.
The downside was that he wasn’t clear on costs if the appeal failed. Also, I was uncomfortable when I found out that the man was also a licensed associate real estate broker with a large company. I’ve always believed that creativity should be celebrated, but wearing too many hats can crowd a room and confuse the guests.
I’m sure the man does not appraise his own clients’ purchases or sales, but what about the deals of his associates in the office, in other branch offices or friends in the business? How could there not be some ever-so-slight expectation to "come in with the right number" when appraising a home?
After all, if the home doesn’t appraise, the deal can fall apart and the real estate agent, loan rep and escrow officer will not receive a commission.
When I questioned the man on his multiple roles, he said he felt no conflict of interest and that a real estate broker was one of the best possible persons to ascertain the value of property. Since then, I have found several other real estate professionals in at least two different roles.
Perhaps I’m too much the purist, yet I think appraisers should appraise, and agents and brokers should list and sell.
I can hear it now: "An associate broker in my office, who also works as a professional real estate appraiser, said this property is worth $376,500. …"
By the way, you can also appeal your property-tax assessment yourself. Most appeals must be made by July 1 with the County Board of Equalization, or similar agency. A hearing is then set. If the consumer or the assessor’s office is not satisfied with the equalization board’s decision, either may appeal within 30 days to the State Board of Tax Appeals.
The equalization board has advised that filing an appeal is worthwhile if the taxable value shown on your tax statement is higher than the price you could expect if you sold your property. The most common way to determine a property’s worth is by comparable sales prices.
You wouldn’t have to spend your time with this appeal mess if you hired somebody to do that work for you. Using an appraiser sounded like a decent idea, but there were too many hats in his ring for me.
To get even more valuable advice from Tom, visit his Second Home Center.
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