Wednesday, April 14, 2010

Need for Appraisers in Tax Appeals

The Need for Appraisers in Tax Appeals

"How are your tax appeals going" I've asked a couple of attorneys lately.
"Not very well", I often here. "The property owners won't pay for appraisals
so the assessors won't even talk to me to try to settle the cases. They drag
on for years with little results." While these attorneys really understand
the legal proceedings, they are not valuation experts. And neither are their

One attorney I spoke with this week said his client is determined to have
his day in court and testify himself on the valuation. Cases such as "RBF
Investments, Inc. v Hennepin County" the court ruled the property owner,
despite his real estate experience, was not an appraiser and didn't qualify
as an expert witness.

When it comes to negotiating property tax settlements on income properties,
like shopping malls and apartment buildings, there are a handful of
attorneys in town that do this every day and do a good job of valuing
properties based on their rental income.

But that doesn't work with land. Data for land valuations is difficult to
find and interpret. From both the Critical Thinking Club and my Meditation
classes I'm learning that each of us sees the world through the curtain of
our own belief system, which often misleads us.

I'm doing tax appeals on two developments with similar products in the same
city. I thought the second would be a cut and paste exercise of the first. I
was wrong.

Before doing these reports, I had a perception that this community could
support high dollar housing based on 3 observations : 1) I have a real
estate investment partner who has this large beautiful newer home there in a
lovely upscale subdivision. 2) There's a Byerlys. 3) The City Hall has
potpourri in the ladies room.

The first development I walked really works, homes are still selling, though
at lower prices. The location and site planning are wonderful. The second
development taught me the first one was the exception at being successful in
the higher end. Further quantitative research showed me, despite the Byerlys
and the potpourri at City Hall, this is NOT an upper end suburb.

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