Profile picture for celothae

Hard to value house

I purchase some property in November for cash.  I paid $36,000 for it.  This property consists of 4 city lots (25 x 100) and 2 houses.  The county assessor is valuing this property at $75,000.  Needless to say, I am not happy with this tax rate and I plan to appeal it.  Essentially, this property CANNOT be worth more than $50,000.  I'm being appraised as the "best" property in the neighborhood, when I'm not even close.


Here is the crux of the issue:
The county assessor sees 2 house and 4 total lots. 
Unfortunately, that's not even half the story.
In reality, I have a 2400 square foot, 2-story 1910 craftsman-style building that used to be house, but is now more of a shed.  The issues with the house include (but are not limited to):
-no electricity
-no plumbing
-no walls (it is ripped down to studs)
-severe termite damage to the floor joists
-a wet basement with rotting sill plates
-one water-damaged foundation wall

The other house isn't great, either.  Its a 1936 brick-veneer bungalow.  It is 2-bedrooms and 1 bath.  Its issues include:
-Bad wiring. 
-Frankenstein plumbing, leaving us with no water pressure.
-No heating or cooling of any kind. 
-Rotting wood windows, plexi in place of glass panes.
-An unlevel floor. 

I spoke to the assessors office and they will take my inspection reports into consideration, but they also want comps for the area.  I've looked and my real estate agent has looked.  The only things that come close to being similar to my property are half the lot size and selling for $12,000 to $20,000.

Should I just use those and go on?

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April 16 2013 - Oklahoma City
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Replies (3)

 I've looked and my real estate agent has looked.  The only things that come close to being similar to my property are half the lot size and selling for $12,000 to $20,000.

If you are truly serious about appealing your taxes, you will NEED an appraisal - which costs money - Realtor comps and CMAs for THAT type of property wont cut it. If you don't want to spend the money, well, good luck.

Talk to a couple different appraisers first=- give them your data and try to get a ball park value first before shelling out the cash for an appraisal.

What you have would be considered complex, hence an appraisal is needed. HERE is a link to find an appraiser in your area.....
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April 16 2013
Profile picture for celothae
I actually tried to get an appraisal already.  I talked to 5 separate appraisers who all said the same things:
There are no comps.
The value would be ballparked, at best.
The functional obsolescence of both properties would be extremely hard to figure.

My real estate agent, who is also a landlord and owns multiple investment properties, said that she wouldn't recommend an appraisal simply because the property is unique.

Plus, they have all told me it will take 6-8 weeks.  The problem is that in my county, I have only 20 days from the date I am notified of the value to appeal.  Also, an appraisal is not considered the best method in my county. 

I went through this several years ago with a family member who owned the original farm house in an area of all new subdivisions.  The assessor priced her home as though it was new construction.  All we needed in that case were copies of local sales, since none could even be considered close to comparable, and inspection reports.
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April 16 2013
First, if you truly want an appraisal done then you should request to postpone or reschedule your hearing.  Then hire the appraiser to look at the property.

Secondly, what are the values of similar lots in the area, containing the same amount land your properties do, individually and combined? 

If comparable vacant lots are selling for low prices then you may be able to approach it from that stand point.  As land only.  If you hire an appraiser make sure he considers this as well.  

Also while you are waiting on the hearing to be rescheduled ask the county appraiser to come out and view the land and condition of the improvements.

It's about fair market value and the county may not be looking at it the correct way.  Basically what it sounds like to me is that you have 2 contiguous lots (that I recommend assembling together) containing two improvements which contribute nominal to no value.  Therefore, all of the value is in the land.  The existing structures, from your description, appear to be in poor condition and it would take a ton of money to renovate/remodel so the best thing to do is just remove the structures and redevelop.  Also, with respect to fair market value to an investor, there's a cost to demolish & remove the debris and that would also affect what someone would be willing to pay.

Likely the county is not recognizing what's actually there and also working on the premis that "regardless of condition they have to value the existing improvements".  

So, if those land values are low I think that maybe this is an approach to consider and really push that the improvements, in their current conditions, offer little to no value.
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April 16 2013
 
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Hard to value house
Profile picture for Keith Houston
Latest reply by Keith Houston
April 16 2013 | 3 answers
  • Posted by celothae
  • In Taxes
  • April 16 2013
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