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Is it time to appeal your real estate assessment?

Published: Wednesday, July 31, 2013 5:21 p.m. CST

It’s that time of year again. That time we’re all so excited about. Time when we each start receiving our assessment letters in the mail.

This year is a little different, though, in that for many they are arriving earlier than in the past. Without boring you with the details, the gist is that basically a law changed which allows township assessors to publish reports earlier. Therefore, we already have seen several township assessors publish their assessments.

So what does this mean to you? Well, it means a couple of things.

First, be on the lookout for your assessment letter in the mail. It is no longer a postcard, as it had been in the past, but rather a full page letter.

Second, even if you don’t actually receive the letter, your deadline to file an appeal – should you choose to do so – is just 30 days from the date the assessments are published in the papers (notably, the Northwest Herald).

That being said, the assessment letter you receive has more information on it than it did in past years.

Specifically, your “Fair Market Value” is clearly identified as such. Take notice of this amount as it is perhaps the single most important piece of information contained on that letter.

This is the value of your home as given by the assessor through the assessment formula. Take a look at that number. Is it close to what you think your home is worth? If it happens to be lower than your idea of value, good for you! Undoubtedly, though, in today’s market, most will likely believe their home is worth less than the assessor has listed.

Keep in mind that the assessor truly only re-evaluates your home every four years unless you appeal the value formally. So, even though some market conditions may suggest the value of your home has declined, the calculation may not have panned out for your home. The point is that it may not actually be the assessor’s fault that your assessment is off, as you see it.

If you believe your value is lower than the assessed Fair Market Value, you should pick up the phone immediately and contact your township assessor and have a discussion about how they came up with your value. Most often, they will talk you through the process and explain how values are determined.

Possibly, in some situations, if you call early enough or depending on that township’s staffing abilities, they may even be able to work with you to make an adjustment without going through a more formal process.

You will need to have actual evidence to support your case, of course. Diplomacy is always the best first option. One of the biggest challenges is ensuring all the data is accurate regarding your home or those you’re comparing against. While assessors should have details on what work has been done to homes, they don’t always have the correct information on the square footage of homes, number of bedrooms and baths, finished basements, additions, or other upgrades.

If, however, that doesn’t work for you, you may wish to contact your local real estate agent. Many real estate agents will offer some quick advice about the value of your home or even offer to send you some information free of charge. Homes that are more “cookie cutter” in nature, like those in a new home development where they may even have model names and such, are rather easy for most agents who work that area to give you an approximate value range. At this point you really need to get a feeling for what your home’s actual market value may be.

One problem that exists, however, is that the assessor’s Fair Market Value is based on a Jan 1, 2013, value, while an agent may be thinking of current conditions.

Some markets in the county have improved significantly in the past 6 months so that needs to be accounted for. You need to know what your home’s value was on Jan 1, 2013, not today’s value.

The issue with this is that the slowest time for housing is often in winter, so finding good comparable sale’s data may be more difficult for that time period than the spring, summer or fall. The best comparable data is that which are closest to Jan. 1 even though technically comparable from July 2012 to June 2013 may be used.

If you believe, and can offer sufficient proof, that your home’s value is significantly less than the assessor’s determination, you should consider filing a formal appeal.

As daunting as that sounds, it is really rather simple. But, keep in mind, that if you file an appeal it might hurt you. It is possible, although perhaps not likely, that the panel who hears your appeal could actually raise your Fair Market Value; while it is a rare thing, it is a possibility that you should be aware of.

As was mentioned, filing an appeal is actually simple and typically does not require an attorney or an expert.

Certainly you can hire an expert to do this for you, but for most people it is unnecessary. Most of the form can be filled in right from the assessment letter itself. The hardest part is to support your position of value. This can be done through a few options, such as, an assessment appraisal, property comparables, or assessment comparables.

Very basically, an assessment appraisal is attained by hiring a local appraiser for a fee to give you a formal opinion of value of your home as of Jan. 1.

Property comparables are often attained from real estate professionals, who search the MLS database looking for sale’s data of similar homes that sold in the fourth quarter of 2012 and first quarter of 2013. Some agents charge a fee for this service and others do not.

Make sure you select an agent who is familiar with this process, someone who has done this before, and who knows your market area well. Assessment comparables are less often utilized but is the process of appealing your value based on your neighbors’ assessments. That is, if your neighbors all have similar houses to yours, in theory, you should all be assessed equally.

There are flaws to this logic, however, that there isn’t space here to cover. You can’t compare the taxed amount directly as different types of exemptions may distort the taxed amount.

If you take nothing else away from this article know that 1) you have just 30 days to file an appeal once your assessment is published in the paper, 2) appealing is not difficult and often doesn’t require hiring an attorney, 3) know your home’s value as of Jan. 1, 2013. You don’t have to wait to get your assessment to start finding that out.

Forms are available online at the County’s website, along with the Board of Review’s rules, which should be read prior to an appeal.

• Jim Haisler is a licensed real estate Managing Broker, CE Instructor and Pre-license Instructor. He is the Chief Executive Officer of the Heartland REALTORŽ Organization but is not an attorney. This information is provided as informational and is not legal advice but rather his opinion based on his knowledge and extensive experience in the real estate industry.

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