When I was contacted by my client some months back to help her with her property re-assessment application, I had no idea what I was really in for.
Her property's value had dropped since purchasing it and she was being taxed much higher than if she had bought her house recently. I helped her out with some comparable sales to send in with her re-assessment applications and a few months later she called me back.
She had received a letter stating that she had a hearing set for her appeal. We got right to work pulling new comparable sales (from the specified time frame) and doing our research. She attended a workshop on the process and even found an appraisal dated in the time frame of the comparables.
We spent hours getting ready and my client is good! She had made copies and tagged all her exhibits, she went to a hearing beforehand to watch the process and get more information. She did lots of homework and was organized. We were feeling pretty good about how prepared we were!
The big day came and we watch a few people go before us. All of them accepted a previously negotiated assessment that was a bit lower than the bill they had been sent. When my client was called, she said that she did not agree with their newly negotiated value (it was MUCH higher than it should have been). We were called up and sworn in. The Assessor said his bit and gave us the comps he used. Unfortunately, none of his were COMPORABLE! One was not even in the time frame that they gave us to use!
We were prepared, had great comparables, an appraisal, you name it, we had it. We started going through our comparables and then he hit me with it...."Your comparables are bank owned and short sales". "Yes, your honor" I said. I went on to explain that those were the ONLY comparables available in the entire area.
Then the judge hit us with it...."Your comparables must NOT be bank owned or short sales". And with that, he ruled that her value stood.
We were dumfounded and totally speechless. Both us were sitting there looking in total surprise. He thanked us for our wonderful presentation and sent us on our way.
As we left, quite a few others came out and started asking questions and for our help. I was the only Realtor® there and though we lost, we obviously knew what we were talking about. So many people were there just hoping for a little help. I felt horrible for them but couldn't get them any comparables because I did not have my computer with me.
My client emailed me later and let me know that NO WHERE in the work shop information or any of the instructions did it mention that the comparables had to be regular sales!
If you are working on your property re-assessment, MAKE sure the comparables you use are NOT Bank owned or Short Sales. If you need help in finding these for your North Orange County home, I am happy to help. Trust me, now I know! Don't learn the hard way like we did!
I originally imagined writing this story with a picture of us on the steps high fiving eachother for a great job at taking on "The Man"...NEXT TIME!! ___________________________________________________________________________
Cristal Drake - Fullerton Realtor (R)...At Your Service for all your Fullerton area real estate needs! Prudential California Realty - 714-423-7525. DRE#: 01272061. All information in my blogs is believed to be accurate but is not guaranteed. Copyright 2009 all rights reserved.
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Good to know. Riverside county has been reassessing but I have indeed given out comps to have properties reassessed. It never dawned on me that short sales and bank owned would not be considered. It's almost the only houses selling. That definitely is not a fair assessment of new market conditions.
Featured @ Club Chaos
Thanks for your comment Diane! We were mortified! I find it interesting that they used a comp outside of the specified time frame AND comps that were so far away and much larger. I just think they need to let us know in advance if we can't use the most comparable comps, ie; short sales and bank owended.
My advice, have a back up set with no reo's, etc...just in case! Good luck!
That is completely unrealistic. Nowadays, there are probably more short sales and REO sales than regular sales. And many banks are not willing to sell for less than market value. That is an incredibly stupid rule. You should start a petition and call for a hearing. Seriously!
Lisa, I was wondering if there was an appeal mechanism for the appeal (LOL). Learned something new today... :-)
I had the same thoughts as C. Here is the thing, it comes down to fairness, reality and fighting just for the principle of it. The fact is that FHA appraisers look at only like for like property (bank owned, short sale... it doesn't matter). It should be in the same direct immediate area, going back only 3 months only. Then plus or minus enhancecements. They only broaden their scope if they absolutely have to. Jimminy Crickets, it would be nice if they could have some consistency but I guess that might actually make it too easy!!!
It was nice of you to go to bat for your client, I am sure it was worth a good deed! Best of luck and I guess next time double arm yourself, I know I will now.
Hi Cristal!
That is exactly the opposite of what I was up against in the appraisal I was fighting...the appraiser said that the short sales WERE the new market value and would not consider normal sales! Someone should make up their mind!
It is very difficult to understand how we have to face the devaluation of property due to foreclosure and shorts but can't use them in this type of appeal. The values have definitely dropped due to the abundance of these properties on the market.
Wow, that is completely unfair. I know MANY places here that you would be in the same situation - ONLY foreclosures and short sales would be available for comparables! What is she going to do? Can she appeal the appeal?
WHAT?!?!
When value is reported through an licensed appraiser for a loan - ALL COMPS MUST BE REPORTED! This is absurd. Because it's for tax revenue the turn the tables? This is ridiculous!
Cristal - I used to say that REO's and short sales were extenuating circumstances, weren't valid comps. That was hundreds of foreclosures ago - they are the market now. A sale is a sale whether it is bank owned, or not. Short sale - it is what buyer's are buying. They are defining our market these days. Regular sellers have to adjust to them if they want to sell. Hopefully, there is an appeal process - in Nevada it is to the State. Good luck - go gettem and write an article for your local paper so many people can get be taxed fairly.
Cristal - that appears to be contrary to the new appraisel guidelines, but, it also appears that AHJ's are going to be quite stubborn about lowering any revenue streams.
This fits with what the tax assessor told me when I called in about a customer's sale and current taxes. Thanks for the reminder!
I've heard similar complaints and it seems the system is getting worse and worse - how utterly assinine and ambiguous - it makes us feel like we are preparing for a David and Goliath fight.
Thank you all for your comments and support. It has been frustrating to say the least. I actually could have lived with ommiting the short sales and reo's (though they make up 90% of the comparables)....had I just KNOWN! That is the real kicker. Thanks for your support and I have it on my list to contact the newspaper about it!