88% Tax Assessment Reduction

88% Tax Assessment Reduction
>
> A developer got preliminary plat approval for a couple hundred acres on the
> far edge of the northwest suburbs. The bank's appraisal appeared to be
> professionally done by an appraiser with nearly 50 years experience. Unless
> you really read the appraisal, and understood both land development and the
> particular market. Then you could see the appraisal was a work of fiction -
> and it didn't even have entertainment value.
>
> The land was annexed into the city. The developer never filed the plat and
> the bank foreclosed on the land. The bank engaged me to assist with their
> property tax appeal.
>
> The assessor treated the 200 acres as if the preliminary plat was still
> viable and valued it as a subdivision. I treated it like it is: 7
> independent parcels. Only one 4 acre parcel had water and sewer service to
> the property. And that one I concurred with the assessed value and dropped
> it from the petition. The other six parcels cannot be developed because
> there are no utilities so they needed to be analyzed on the characteristics
> of the individual parcels.
>
> The 88% reduction is a landlocked parcel that is mostly flood plain.
>
> The 80 acre parcel that had the most usable land a got a 54% reduction in
> assessed value. However, I also successfully challenged the residential
> classification and had that changed to agriculture. When factoring in the
> classification change the property tax refund will be 62%.
>

Procrastination

Procrastination

I'm the coordinator for a Yoga program that offers classes 3 days a week.

My Thursday evening instructor, call her Sally, was always late for her 6:45
class. We honored her request and moved the class time out till 7:00. Then
Sally started coming at 7:15. So I replaced Sally with an internship program
for new yoga teachers - who show up on time. Sally's a popular teacher so I
kept her twice weekly Sunday mornings -figuring she would clean up her act,
having lost her Thursdays. Sally still shows up at 8:10 for her 8:00 class.

Puzzled by Sally's behavior I did some research and this is what I learned
about procrastination:

*Procrastination is only remotely related to time management,
(procrastinators often know exactly what they should be doing, even if they
cannot do it), which is why very detailed schedules usually are no help.

*The procrastinator is often remarkably optimistic about his ability to
complete a task on a tight deadline.

*I'm Too Busy - Procrastinators may be used to calling attention to how busy
they are. " The procrastinator may even spend considerable time justifying
his reasons, time that could be spent doing the task at hand.

*Manipulation - Procrastination may be used to control or manipulate the
behavior of others. "They cannot start if I am not there." Let's face it:
deliberate delay drives others crazy.

*Coping with Pressures - Procrastination is often truly difficult to
eradicate since the delay behavior has become a method of coping with
day-to-day pressures and experiences. If you stop procrastinating, won't
others put new demands and expectations on you? It's easier to have an
excuse, to delay, to put off.

There are consequences to procrastination. To Sally it was losing her
opportunity to teach Yoga, something she really enjoys. To all you property
owners out there who haven't yet filed your property tax appeals - your
consequences can be many thousands of dollars you needlessly pay.

Stop procrastinating! You only have until NEXT WEEK to file your Pay 2010
Property Tax Appeals. Pick up the phone RIGHT NOW and call Laurie at
763-420-4757 to determine if an appeal makes sense for you.




P

The Whack Job Green Assessor

The Whack Job Green Assessor

Couple buys a big home in a historic neighborhood and renovate it . They
drive an SUV. The assessor comes to inspect the home arriving on his
bicycle, all decked out in Spandex, in the middle of January. The assessor
kept making comments that the renovations weren't "green enough". He fairly
adjusted the pay 2010 value to reflect the actual costs of the renovations.

No further work was done on the house.

In 2008 the assessor returns, knocks on the door, and the couple's 3 year
old lets him in. The wife comes downstairs after tending to thier new baby,
sees this weird guy standing in her house with her little boy, and
justifiably freaked out. She ordered the assessor out of the house and
refused to let him back in.

When they got their pay 2011 statement, even in this market, with no changes
to the home, the assessed value increased $200,000!

The homeowner called the assessor, who could provide no comparable sales to
justify the $200,000 increase. The assessor said he cannot adjust the value
without inspecting the home. The homeowner doesn't want this "whack job
green assessor" anywhere near his young family. So he called me.

I don't have the expertise for this historic neighborhood. So I'm engaging
another appraiser to value the house. And I'll navigate the process with the
wacko's supervisor to help out this family.

Another homeowner I spoke to this week has a really nice assessor, as most
are. And the assessor admitted she set the values by "throwing a dart at the
wall".

Property taxes are complicated. Need help? You only have until APRIL 30th to
file on your Pay 2010 taxes. Email me your Property I Ds, property locations
and phone number to landforsale@visi.com

Or call Laurie at 763-420-4757. Don't delay.

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
clients.

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.

Myths the Assessors Tell You.

Myths the Assessors Tell You.

I hold a mortgage on a little house that is assessed nearly double what it
was purchased for.

The assessor comes out, notes some issues with the property condition, and
offers a 7% reduction. I instructed John, the property owner to call him
back and say this: "I don't have enough data to evaluate if your offer is
fair. Can you please send me the comparable sales that support you value?".

John had me laughing out loud when he told me the assessor's response: "I
don't have any comparable sales. I just made some adjustments regarding the
property condition."

I imagine many taxpayers are happy for any reduction, accept this and go
away. It must work at least part of the time that the assessor does it --
and he's very pleasant.

Last week I met with a builder developer who has hundreds of lots. He met
with the assessor and was told "we can't change your values without changing
everyone's in the development and its a really really big development". Not
true. And how did the assessor set their values? She looked on the builder's
website and used the list prices for the lots!

Assessors have a tough job, especially now. They do what they can with the
data they have and the limited time they can devote to each parcel. They
make mistakes. We all do.

The Property Tax Appeal process is there is correct those mistakes. It
forces the assessor to either cough up the data to support their values or
negotiate a settlement based on data provided by the taxpayer or their
representative, like me. Its rare for a case to see the courtroom on
valuation issues alone.

Does a property tax appeal make sense for you? Time is running short-you
only have till the end of THIS MONTH to file. For a free quick evaluation
send me your property ID#s, property location and phone number to
landforsale@visi.com




TIP for dealing with frustrating phone machines for "Customer Service". Bank
of America has my home mortgage. When they sent me a statement that they
applied my extra principal payment to the escrow account I was a little
upset, as I don't have an escrow account. When I called their "customer
service" number there was no option for this problem and I absolutely
couldn't reach a live person. Looking on my statement there was another
phone number for getting a home equity line. I called and a salesman
answered on the 2nd ring! When they think I want to buy something they
answered the phone! The salesman got me to a live person who resolved my
problem.

Contrast this experience with one I had the next day. A funds transfer I had
ordered last week didn't go through. I got a personal call from the Citizens
State Bank of Waverly that a check I wrote for $250 bounced. Within a minute
the delayed transfer was made - problem fixed. Support your community bank.

Property Tax Appeals and Income

Property Tax Appeals and Income

When you file a property tax appeal on property that has income you may be
subject to the "60 day rule" which states:

"Information, including income and expense figures, verified net rentable
areas, and anticipated income and expenses, for income- producing property
must be provided to the county assessor within 60 days after the petition
has been filed"

This is clearly applies for office, industrial, retail and apartment
buildings. But what about vacant land?

To be on the safe side, when I file a property tax appeal that includes land
rental for farming I do ask for this information from the property owners.
But I hit an interesting one this week.

The assessor inspected the property, saw sand mining activity, and looked to
be attempting to invoke the 60 day rule to have the petition tossed out.
There were two issues at play here in the taxpayers favor:

1) No income was coming to the developer who owned the land. He had a deal
with the excavator extracting the dirt that the excavator could sell the
excess dirt and keep the proceeds.

2) A prior tax court case, Menards vs Sherburne County from 1998. Sherburne
County filed a motion to compel discovery of sales and income information.

The court ruled: "The central question in this matter is whether
owner-occupied property which has no rental income falls within the data
production requirements of Minn. Stat. § 278.05, subd. 6. We find that it
does not"

It was a nice try by the assessor. Keeps me on my toes.

.

Skip the Board of Review

Skip the Board of Review

I spoke with a developer last week about his property taxes. While he agreed
the assessments were way too high, he had given up fighting them. The local
assessor wouldn't change the values. Then the developer went to the local
board of review which also resulted in no change.

Last year I attended a local board of review to represent 6 taxpayers.
Granted, many who protest their assessment in this venue, or any venue,
whine! I haven't found whining to be an effective strategy for ANYTHING. I
came to the meeting armed with well documented valuation reports. Results?
No changes to any of the properties at the Board of Review.

So the taxespayers filed Tax Appeals in Hennepin County. Hennepin County is
different than most of the other counties. There are 8 "super cities" where
there is a City assessor and Hennepin County is not involved in the appeals:
Bloomington, Brooklyn Park, Eden Prairie, Maple Grove, Minneapolis,
Minnetonka, Plymouth and Richfield. Many of the cities in Hennepin County
have hired Hennepin County to be their assessor. And some cities have hired
private individuals to be their assessors but Hennepin County handles the
appeals. And this is the category these 6 appeals fit into.

Hennepin County was great to work with. The assessor spent nearly a whole
day with me visiting the properties that the private assessor had valued. He
did very thorough research and these are the results of these 6 appeals:

1. House reduced $38,000

2. 5 Lots. No change, which is rare for me because I only accept appeals
that I believe I can get a reduction. The assessor and I used different
comps. And, while I still think his values are too high, he can support
them. All we can ask from the assessor is that they have solid data to
support their opinion of value. Its rare to find 2 appraisers arrive at the
exact same value.

3. Land reduced $373,000 or 49%.

4. Land reduced $95,000.

5. Land reduced $80,000

6. The big one: land reduced $817,000 or 65%!

And recall the Board of Review gave NO reductions on these properties.

Skip the board of review for your Pay 2011 values. And you only have until
April 30th to file a tax appeal for your 2010 taxes.