Property Tax Assessments ... FAQ1     FAQ 2   FAQ 3

Historic Homes

Q Hello, I just purchased your downloaded property tax appeal book. While it has some useful tips and ideas, I was disappointed that you finessed the historic house issue. I have a 250 year old stone & brick farmhouse. May I ask you to refer me to some sources that might address low valuation approaches for an old old home. Thank you.

A. Finding a matched pairs for a historic house ( especially 3 comparable's) that sold at a specific time frame may be difficult to find. Because of the nature of historic homes, there are few sales to choose from. Most likely you have to go out of your area to find comparable's that sold within the time period you are adjusting for. You would have to make adjustments for the various areas if they differ in amenities, upscale/downscale neighborhoods, accessibility, ... If the time periods differ, you would have to extrapolate the value for appreciation or depreciation adjusting for the time period difference. There is a lot of historical data that can be gleaned but it would take some digging into the Multiple Listing Sold Data to come up with those values. There may be lots of functional obsolescence, deterioration, structure problems ... with the comparable's to take into account.

Historic, in my opinion, means something like "George Washington slept here." There are different opinions. Someone recently teaching an appraisal class on historic homes validates using exclusively the matched pairs scenario. After all, a 250 year old house and a contemporary house would market differently. The guy whose going to buy the old farmhouse is not going to buy a contemporary home. He insisted on going out of local area for a comparable old farmouse -- the people who are going to buy a 5 year old home are not going to buy an old home.
 
And then you have the other way of looking at the situation. A house 250 years ago had no plumbing, electric, modern furnace, modern kitchen ... etc. Every time you change the house you are changing the effective age. Functionally you are not dealing with a home of that age and would not have a problem comparing it to a 30, 40, 50 year old home.
 
In the end you'll have to knock holes in comparable's and you are at a disadvantage since the inspector has been in the other homes and you have not. First talk to the property tax assessor and explain and ask for adjustments if you are hearing the termites gnawing. If you get no satisfaction you'll have to prepare your evidence for a municipal tax appeal. Eventually it all boils down to comps.They are willing to listen to anything you have to say.
 
A professional appraiser will be unfavorably scrutinized when comp value differences approach 5% off the norm. With the municipal authorities in New Jersey and many other states, you have to beat their figure by 15% to win your appeal. That means the municipal government stacks the deck in their favor. That 15% means they can be off 3 times the acceptable accuracy rate standard for a professional appraiser before they give the ordinary citizen a chance to win an appeal. You really have to sharpen your pencil.

 

Municipal Valuation Inspector

Q Requesting your advice on how much/how little to share with valuation professional that visits property in the course of a municipal-wide "re-assessment" of all properties in town.  Is it recommended to provide them with a tour of the interior?  Or is it better to let them guess?  Is it wise to point out all the "negatives" (e.g. tension wires, environmental hazards, obsolescence issues) prior to their determination of valuation?  Or is it smarter to "save" these issues for the appeal?  If they are pointed out ahead of time, then their report would likely address the issues making it more difficult to raise the points as not considered in the appeal.  Why not add a section in your next addition addressing these questions.  Proactive sales to the appraiser?  Or stealth approach to enhance the appeal probabilities?

A. The valuation inspector generally does a tape measure of the outside area of your home and a look-see on the inside. They'll ask if there is a basement or anything obvious that they think is attached to your property. I'd hang with him/her, help hold the tape measure asking him to note the negatives as you point them out.

It's in your best interest not to point out the positives - after all a paid professional should be able to see that. Do point out the negatives - all of them. Hopefully he/she will make note and adjust for them in the field. Nevertheless, when you get your property revaluation you will have to personally ascertain that these negative have been fairly treated. The property tax record card is available for you to scrutinize. What is important is that the market value for your home (adjusted for the assessed value) fairly reflects all the negatives and not some inflated value.