Posted By Cliff Tuttle | August 11, 2012
Traditionally, assessors have culled sales prices that they think are too low to represent fair market value. In normal times, they may have been right. But not now. In the past four years, extreme low prices have been the market in many places — especially in lower priced areas. But the trend extends to all levels.
Everyone who has tried to sell a house in the past four years (and even longer in many places) has been aware that there are so many distressed and bank owned houses on the market that they influence the the market price of everything.
Fair market value is what a buyer not under compulsion to buy will pay and a seller not under compulsion to sell will accept.
When investors are able to buy cheap houses that need lots of work, in order to upgrade and resell, they are responding to market conditions of our time. We should be glad about this. They are risking their own money while improving OUR neighborhood. Yes, they may make a profit. But they are only getting what the marketplace gives them. They must compete in the marketplace to buy and after they have rehabilitated a property, they must compete in the same marketplace to sell.
Yet, for some reason, Assessors consider a purchase by an investor of a house needing work as an aberration. This is absolutely not true! Supply and demand are at work here just as much as when a homeowner sells at an excellent price. As long as properties are exposed to genuine market conditions, they ought to be considered to be market value prices by assessors — not as sub-market aberrations.
If assessors continue to hold this unreasonable position in the face of the evidence, you may wish to appeal their decision to the Board of View. While you may have to wait a two or three years for the case to come up, the Board’s decision will pick up the intervening years.
In practice, the Board often brokers a settlement that the assessors and other parties (usually suburban school districts this time) won’t consider until put under pressure.
However, you must appeal within 30 days after the initial decision. So, don’t put off appealing.
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