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And tax assessment season can be more rough, rocky and strewn with pot holes than road repair season. Here are some of the lessons we learned from successfully challenging our tax assessment. This was over the 4 year reassessment cycle, or about 5% a year. Mary didn't want to fight the assessment, but Beth prevailed. We kicked our own tires: New roof needed: $8,000 New driveway needed: $2,000Other Updates: $3,000Location: Backs up to the 490 Expressway (picture). I even thought of bringing an audio tape of the sound/din of the traffic. The fellow ahead of us was challenging his appeal terribly. Common friends and acquaintances and local history. Beth added details and had data and documents, with copies for the appeals officer. I just sat there for moral support, to monitor the proceedings and take notes, if necessary. The assessment was reduced $8,000, from $118,000 to $110,000, or about 6. We had been told to hope for "split the difference" or a 50% reduction. We got a 40% reduction of the increase and settled for that. Your local tax assessment process may be different. Even so, there are many lessons to learn about challenging your assessment from Rochester's 2008 Re-valuation. Owners had until 3/18/08 to either request an informal review or file a formal challenge with Rochester's Assessor's Office. Formal challengers can negotiate privately before the matter is presented to the Board. After the Board Decision, dissatisfied challengers can still take their case to court. Percent challenges varied by area from just above 0 to just over 20%. The highest areas of challenge were in the areas where the valuations went up the most. The lowest areas for challenges were where the valuations went down. One local condominium group challenged their reassessments. Through their Owners Associations they hired a property appraiser and filed their challenges. The group of 97 owners had their assessments reduced by 7%, from 20% to 13%. Is the challenge worth your time, money and aggravation. Your home's market value and its assessed value should be the same. Your home's assessed value should equal its market value. There's been a lot of griping about assessment increases, which seem based more on the peak of the Real Estate bubble, than on the reality of the sub-prime mess. His home value is assessed at $5MM vs his value of $2MM. Mr Golisano has run several full page ads in our local paper telling home owners how to best fight their tax assessment. He points out with assessments: you're "Guilty until proven innocent". In other words: you need to prove the assessment wrong. If you think your home would sell for much more than the assessment, it may not be worth your time and effort. Some people challenge their estimate every time, but it may not be worth the effort and expense for you to mount a challenge. You'll have to do research and provide data, information and pictures for documentation to support your case. You'll get what you pay for, in time and money, as well as help. Your local assessor's offices has a personality (easy, tough, fair). You can often find out about their attitude by asking friends, neighbors and Real Estate Agents. If your assessor tends to be lenient (66% challengers got reductions in Rochester, NY), it may be wise to contest your assessment. If your assessor is tough, it may not be worth the bother and aggravation. The numbers for the 2008 Rochester assessment: 66,700+ properties in the City of Rochester 4,200 (16%) property challenges 66% of property assessments successfully challenged 6. Information and forms to challenge your assessment should be available at your assessor's office, and now often online. Make sure you comply with deadlines and other basic requirements. Although this may seem obvious, in some jurisdictions they make it difficult to find out exactly what your assessment is. You may also need to do calculations in areas not using 100% valuations. One way to have your assessment lowered is to challenge the description and features of your home. Might the assessor be counting unfinished space in the basement or garage; or improvements you don't have. This is how the assessor calculated the value of your home, and your best way to dispute your assessment. In the past you might have used a Realtor to get comparables. If worse comes to worse, you can get comparables at the assessor's office. It's suggested you get 3 to 5 homes comparable for: square footage, lot size, age and style. Most Assessors use computer programs which may not be up to date on the data or the condition, and rely too much on square footage. The owners hired a property appraiser through their condo board and filed appeals. Their increases were reduced to 13 percent, well worth the investment. Condition can be important in challenging your assessment. At best your Assessor has done an exterior evaluation of your home (Our County has purchase the "Birdeye View" from Pictometry). Does your home need a new roof, a new driveway or other major repairs. Generally when there is an adjustment, the difference between the old assessment and the new assessment is split. Make copies for the assessor (The person you meet with often doesn't make the decision there and may need to present it to someone else and justify his decision. Remember, you may be the 20th person he's spoken with already today. Many jurisdictions have a formal board where you can take disputes after the informal meetings and before a court hearing. You may be able to attend, which should help you in your own preparation. It may be wise here to have the more formal documentation of a Real Estate Agent or a Certified Appraiser ($300-$600). You'll have to calculate the court costs in terms of your time, as well as your legal fees. And that holds particularly true for the laws surrounding foreclosures (particularly involving bankruptcy). Upstate New York generally did not experience the irrational exuberance of much of the rest of the country and the sub-prime mess has only had indirect effects. Locally the inventory of the paid sites are not up to date. Cash is King in foreclosures too, but you don't have to come with all cash. You can be pre-approved by a bank for your mortgage. In Cash vs Finance deals, Cash has more power and strength usually wins again. What the bank wants and what the bank gets are 2 different things. Just like most investors, the banks won't move off their price right away. But in several months, with carrying charges for the home being about 1% per month, banks are much more likely to negotiate. The banks hold all the cards, so be confident in your hand before you deal. You'll get a smile out of the banker if you make your purchase offer contingent on a property inspection. Take your inspector or your contractor on your inspection. Banks may disclose,but in NYS they are not bound to disclose and "As Is" still means "As Is". This is one of the few areas where "date certain" means"date certain". Bankers often get bonuses to close by the end of a month and there's often a fine of $100/day for delayed closings. You may be able to negotiate a mortgage contingency, but you won't be able to get a home sale contingency. If you have a Realtor representing you they must submit your offer. An early low-ball offer will usually get a full price counter. Low-ball offers are much more likely to be accepted after the bank has had a home on the market for several months. It's not like all those other get-rich-quick shows I see. If it were so easy, why don't they just send someone to your market and buy all the foreclosures. Remember those old Real Estate foreclosure sayings/warnings:"A fool and his money are soon parted" (Ben Franklin, aka Poor Richard) "If it's too good to be true, it probably is". The NAR And BanksIn winter, as we walked into my grammar school, there stood our principal with his hat on, telling every student to take his hat off. This is my first memory of "Do as I say, not as I do. Their hope had been to keep the banks out in perpetuity. And many of these court cases, the NAR is supporting these practices with our dues dollars. Can we continue advocating for what isn't in the best interest of our clients. Wasn't it bad enough when we were compared to used car salesmen. In Freakonomics they showed that Realtors kept their own homes on the market longer than the homes of our clients. In a different way we can cut more costs and make more money by becoming discounters ourselves, selling more homes for less and turning over our inventory 20-40% more often. Does anyone still believe the discounter's motto: "Your first offer is your best offer", at least if you're the agent. Realtors are trained to talk out of both sides of our mouths. Yet we fight those different models in the field, in our MLSs and in court. My local AR makes a home owner sign a waiver allowing us to put a for sale sign on their lawn. Shouldn't there also be a waiver to not put a virtual for sale sign out every where on the Internet. In Seattle, Redfin's and Kelman's hometown, his home address was posted online and a Redfin yard sign was hacked to pieces. Possibly the worst offense was in the national forest at Yosemite National Park where the fake bumper stickers for Redfin were affixed to signs, trees and rocks. Kelman didn't mention 50 anchovy pizzas being delivered to a Redfin Office, but no one has probably read about the Nixon re-election campaign in a while. When an MLS-only discount broker opened shop in Rochester, NY, the local AR forces lined up against him. Efforts were made to stop him, or at least not to deal with him or his home sellers, but all formal efforts ceased when it was found out that this was unethical. The small boys just got a lot bigger and the big boys just got a lot smaller. Well, Zillow may not plan on it, but a National MLS might be forced on them. Might the NAR, through Second Century, invest in a Real Estate technology which uses its own data to make even more money. Might RETS fit in with the NAR's Gateway concept of a data base for every property in the US. From almost no one using the Internet to search for a home in 1997, to over 80% of home buyers using the Internet to find a home, like it or not, the face of Real Estate Marketing has changed forever. The top agents in the office all had their weekly ad sections in the paper, though. Maybe because the DOJ was after Cendant, their old name), the largest Real Estate brokerage company and franchiser. Realogy will shrink their branding budget for newspapers by as much as 2/3's from 2006 to 2008. This increased the share of online spending from 10. Your home's new owners may not share your preferences, appreciate your effort, or even like your work. They don't care how much you know, until they know how much you care. The 3 rules of business: 1) All things being equal, people buy from their friends. ArchivesJuly 2008June 2008May 2008April 2008March 2008February 2008January 2008December 2007November 2007October 2007More. Real Estate Marketing