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PROPERTY & INCOME TAXES -
Reducing Your Property Taxes With A Lower Appraisal (continued)
b. Characteristics of the buildings on the property will usually be included. Information may include total and living square feet, type of walls, roof, flooring, HVAC, number of baths and year built.
c. Information on extra features may include patios and screen enclosures, pools, other ancillary structures, upgraded driveway pavers, etc.
d. Usually, information is also usually provided on previous sales of the home, including sales prices and previous owners.
3. Once you understand the underlying information on your property’s appraisal, you need to look at other similar properties in your neighborhood, to see if they are valued about the same, or if there are large differences. Often, there will be properties close by that are either almost identical to your property, or at least quite similar. Remember, to look at the lot and structure separately, since the appraiser values them separately. In other words, you could compare appraisal values for structures that are essentially identical, even though the lots are quite dissimilar. Or, you could compare the appraised values of quite similar lots, even though the structures are quite different. The idea is to look at some appraisals for similar structures or lots to see if your appraised value is in the same ballpark, or if something does not make sense.
4. You also need to look at the sales prices for any homes that have sold over the past year or two in your neighborhood. As noted, this information is also usually available on the appraiser’s web site (although you may need to go to the city clerk’s office to get this information). This sales information will give you an idea if the appraisal of your property that is based on fair market value makes sense, or if similar real estate has been selling for much higher or lower prices. If your property is valued at a higher value than what similar houses have been selling for, this is additional information that you can use to ask for a reduced appraised value. However, most often, sale prices will be higher than appraised values even though the appraised values were supposedly done at 100% of fair market value. Most appraisers will, as a matter of practice, back off of sales price data by up to 30% to account for real estate fees and other costs, as well as to help ensure that their appraisals cannot be challenged because they are higher than actual sales. So, do not give up the idea of challenging your appraised value just because it is lower than what your house would sell for on the open market. If you feel that the appraised value for your property is high in relation to the appraised values of other similar properties, you will probably have a good case for requesting a reduction.
5. Using the information gathered, try to get a sense of whether the appraised value of your property is too high, compared to the appraised value of other similar properties within your neighborhood, or as compared to recent sales values for similar properties in your neighborhood.
a. When looking at the appraised building values, a good way to compare is to take the building values and convert them into square foot values, by dividing the building value by both total square feet and living square feet. For structures with similar building construction and features, the square foot values obtained should be comparable. If they are quite a bit different, one of the appraised values may be wrong.
b. When comparing lot values, you really need to find similar lots in your neighborhood with respect to both location and features, as well as size if possible. Compare them to see if the appraised value of your lot makes sense. If need be, adjust for size on a pro rata basis.
6. If, after comparing the appraised value of your property to the appraised value of other similar properties, you feel your appraised value is too high, you should seriously consider contacting the appraiser’s office and ask them for an appointment to discuss your concerns.
a. This type of appointment should not be confused with a formal challenge to your appraised value, that is submitted to a Board of Review. It is simply a discussion session with the appraiser’s office to learn more facts about your appraised value and present your case for an adjustment. After your discussion, you may feel that the initial appraised value is accurate, or the appraiser may feel a downward adjustment is justified. Many appraisers are very understanding, and if their initial appraisal seems “out of whack” they will readily make an adjustment. Or you and the appraiser may disagree. But if you do initially disagree, do not give up easily. Sometimes the appraiser will relent and make a downward adjustment, if they feel you will continue to challenge their appraisal.
b. When you do visit with the appraiser, make sure you take with you any data and information you have that supports your request for a downward revision to your appraised value. And make sure it is professionally organized so it is easily presented, and a copy can be left with the appraiser for later review (be sure to keep a copy for yourself). A cover letter explaining your position is also helpful. If the appraiser feels that you know what you are talking about and that you will persist in your case in a professional manner, they will often make a downward adjustment, especially if they feel the facts are on your side and they will have trouble defending their appraisal to an independent party. Downward adjustments in this manner happen all the time. Appraisers just do not advertise this fact.
7. If the appraiser will not adjust your appraisal downward to a level you feel is right, based on the facts you have discovered and presented, and you feel you have a very legitimate claim, consider filing a formal objection to your appraisal. Get the forms from the appraiser’s office and make sure you do this within the statutory time limit for filing. While the majority of people who request a formal review with the Board of Review will not be successful, if you have the facts in your favor you just might win. It does not cost much to file, and the time requirements are relatively small. Just show up when directed and take a few minutes to present your case. No formal representation is required. One
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