Birmingham Appraisal Blog » Property Taxes

Will Alabama Property Assessments Ever Include Foreclosure Sales?

Tom Horn — Wed, 28 Sep 2011 21:24:14 +0000

In the past Alabama has stated that they will not utilize foreclosure sales when assessing properties. They claim that they must use market driven sales. In many areas of the Birmingham, Alabama market foreclosures are playing a big part due to the large number compared to normal sales. In fact the national news states that foreclosures are keeping overall property values down across the country. The fact that foreclosure sales should be used in the valuation of real estate was recently supported by The United States Bankruptcy Court in New Jersey.

Property owners in the case filed a Chapter 13 petition and claimed their home was worth one amount while another party claimed the home was not worth as much. The details of the case can be viewed here. The court found the appraisal that used the foreclosure sales was more reflective of the homes true market value. This was true because the number of foreclosure sales was so numerous that they could not be ignored. In addition to this, the foreclosure sales required less adjustments when being compared to the subject property than did the sales used by the other appraiser. Will this legal precedent have any effect on what types of comparables the State of Alabama will use to assess your home in the future? Have you been successful in getting your home reassessed at a lower amount in this depressed market? I would be interested in hearing your story.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on facebook.

How to Appeal Your Birmingham, AL Property Taxes

Tom Horn — Wed, 11 May 2011 17:17:21 +0000

I looked at some appraisals I recently completed and found that 7 out of 10 homes were over assessed. Property taxes are based on the market value of your home and the market value of your home is determined by looking at what other homes have sold for in your area. If your home has not been assessed within the past year, the assessment may reflect its value from several years ago when sales were higher. You can find out what it is assessed at by looking at the notice you get in the mail that is sent out each year, around late spring to early summer. If you think your home is assessed too high, there are several things you can do:

Look around the neighborhood at homes that may be for sale, active listings usually set the upper limit of value.
Find out what they are listed at. If your home is assessed at a higher amount than what they are listed for, then that is a red flag for your homes assessment.
Try to find out what homes have actually sold for in your neighborhood. You can do this by going to the courthouse, looking online at the count tax assessor’s website, or using al.com, since they have a search feature to find out about sales. Sometimes word of mouth is not a reliable way to get this information.
Once you have determined that your home may be over assessed you can then go about attempting to get it lowered.

The first step to getting it reassessed is to call the tax assessor and let them know you believe that your home is assessed higher that it should be. This should be done within the 30 day time period after you receive your notice. You will be given an appointment to talk with someone about your property taxes. This is a good time to get your information together so that you can “plead your case”. You may want to start with just some sales information such as county records or MLS printouts of recent sales. You will not know if this is sufficient until some time after the meeting (could be weeks). If the basic sales information does not win you the case you may need to get a full Fannie Mae appraisal to provide support for your request. In doing all of this you need to determine if the costs involved in getting this done will be offset by the tax savings. How long you plan on living in your home will also need to be examined because if you are planning on moving soon, the costs may not be recouped before you move.

I offer two levels of service to aid in getting support for the tax appeal. These include the following:

I can provide sales information to the homeowner to give to the tax assessor to show them that other homes are selling for a lower amount (this does not include an estimate of value), or
I can provide a full Fannie Mae appraisal which gives a minimum of three closed sales to support the claim that the subject property’s market value is less than the county assessment.

This information cannot guarantee you that your taxes will be lowered, however it will give you market supported evidence to argue your point.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on facebook.

Appraisals Are Not Just For Mortgage Financing: Non Traditional Uses

Tom Horn — Wed, 09 Mar 2011 13:59:38 +0000

Most people only think about real estate appraisals when they are buying or refinancing a home. In truth real estate appraisals are used for many other “non traditional” uses. Appraisals are required any time the value of real estate is needed. The value may be as of the date it was inspected or it could be as of a past date. The latter type of appraisal is referred to as a retrospective appraisal. I have listed below the various other types of appraisals that are sometimes needed:

Marketing Appraisals- An appraisal can be ordered before a home is listed, either by owner or realtor. By getting the appraisal before the listing you can be assured that when it goes under contract the value will not be a stumbling block to the sales transaction.

Tax Appeal Appraisals- Appraisals for tax appeal purposes have become more popular these days because of the decline in property values. Unless your home has been recently accessed by the county it could be overvalued, resulting in you paying too much in property taxes.

Estate Planning Appraisals- Appraisals are typically ordered when property is transferred due to the death of the owner. This is usually for tax or inheritance purposes. They can be ordered by the attorney, accountant, or family member.

Bankruptcy Appraisals- Most of the time when people file for bankruptcy they want to get rid of all of their bills, however they will usually exclude their home as they want to keep it to live in. Both types of bankruptcy, Chapter 7 and Chapter 13, require the owner to provide proof of the value of their assets.

Foreclosure Appraisals- Lenders are usually interested in this type of appraisal. They need to know the value of their collateral in order to make a decision regarding foreclosure or the sale of a house that is already bank owned (REO-Real Estate Owned).

Appraisals For PMI Removal- This type of appraisal was more prevalent several years ago when property values were increasing. It was used to facilitate the removal of Private Mortgage Insurance (PMI), which was extra insurance that lenders required from home buyers who obtained loans that were more than 80 percent of their new home’s value.

As you can see, appraisals are used for more that just the purchase or sale of a home with a bank or mortgage company. They are used in many other circumstances. Are you, or someone you know, in one of the above situations? I would be glad to answer any questions you may have.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on facebook.

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What’s Happening To The Townhouse Market In The Alabaster/Pelham/Helena Area?

Tom Horn — Mon, 07 Mar 2011 13:43:18 +0000

I recently completed an appraisal assignment in Alabaster, Alabama for an attached townhouse unit and I wanted to share with you what I found. The graph shows townhouse sales in the area from January 2005 to February 2011. As you can see, values are definitely declining.

Based on the property I was appraising, the search criteria included 1 story attached townhouse units with either a slab or crawlspace. The age was somewhere between 1 to 15 years old. At the current time, within the market area, there are approximately 34 similar homes for sale, ranging in price from $69,900 to $139,900. Five of the homes are foreclosures and they reflect the lower end of the price range. It appears that the townhomes are following the behavior of detached single family homes and showing a decline in sales price, while months of inventory is increasing. It seems like these smaller homes would be easier to sell and show an increase because they are more affordable. What do you think?

With declining prices I always tell my clients to make sure they check the county assessor to make sure their home is not being overvalued. If it is this could cost them more in property taxes. If you think your home is over valued you can appeal it, and this sometimes involves getting an appraisal to verify its true market value. If the assessment value is lowered, your taxes would be also. There is no need to be concerned that the appraisal amount will affect your sales price when you are ready to sell. No one will have access to the appraisal except for you. If you think your home is over assessed and you have questions give me a call.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on facebook.

FAQ: Does The County Appraiser Know What You Appraise My Home For?

Tom Horn — Thu, 30 Sep 2010 21:36:51 +0000

Have you ever wondered if the county tax assessor/appraiser knows what your house appraises for when you refinance your home? This was a question I got the other day from a homeowner when I was at their home doing an inspection. The answer is “No”,the county assessor does not know what your home appraises for.

Whenever an appraiser is retained by a homeowner, bank, mortgage company, or anyone else, it is a confidential arrangement. The appraiser is not allowed to disclose any information except to those parties specified by the client. This was a concern of the homeowners because if their home appraised for more than what it is currently assessed at, they believed the assessor would increase their property taxes based on this higher value, however because of the confidential agreement there should be no cause to worry. On the flip side, it is possible to use an appraisal to contest your current assessment, if it is higher than what your home appraises for. Do you believe your property taxes are higher than they should be? If so, give me a no obligation phone call at 205-243-9304 and we can see if an appraisal would help you lower your property taxes.

Jefferson County-Birmingham, Alabama: Are You Happy With Your Property Taxes?

Tom Horn — Wed, 04 Aug 2010 03:48:30 +0000

Well, by now Jefferson County residents in Birmingham, Alabama have received their real property tax notices. Are you happy with the recent reassessments the county has made?

In a recent article on Al.com, they reported that approximately 80% of property owners WILL NOT see a change in their property taxes. They have stated that they cannot use foreclosure sales to calculate a homes market value. They have to use “market driven” sales to arrive at the value of your home. In today’s market, in certain areas, foreclosures do drive the market. If “normal sales” have to compete with foreclosure homes, and their sales price is a result of this competition, then foreclosure properties are driving the market. Have you seen the price of homes fall in your neighborhood? Was your assessment lower this year than in the past? It may be worth looking into. Please give me a call at 205-243-9304 if I can help.

Birmingham, Alabama Homeowners: New Property Tax Assessments are out

Tom Horn — Mon, 19 Jul 2010 03:59:53 +0000

If you live in Jefferson County, Alabama please don’t forget about your property tax assessments, which came out at the beginning of July. It is a good idea to check the value that the county has your house assessed at. If you believe it is too high it is possible to contest the value, but you have to do it by July 3o, 2010.

Knowing what homes in your neighborhood sold for can help you make an educated guess as to whether you may want to contest its value. It is also possible that the county has the heated and cooled living area of your home listed incorrectly which can result in an inaccurate assessment value. Please give me a call if you have any questions about your assessment.

Shelby County Alabama Property Values Decline

Tom Horn — Mon, 24 May 2010 03:38:22 +0000

Click Here For Full Article

Shelby County tax assessors recently released their latest reassessments for 2009 and the results revealed that property values have declined for the first time in many years. Both ends of the value spectrum have been affected. From starter home subdivisions like Ironwood to upscale neighborhoods like Greystone and Highland Lakes. According to the report 80% of the homes reassessed have declined in value. Some of the neighborhoods like Greystone Legacy and Habersham have decreased in value by as much as 20%. Real estate analyst Tom Brander feels the decreases in value are even more than the county has reported. I have been seeing this myself as I appraise Shelby County property. It is almost impossible to do work in this area and not see foreclosures or short sales in the neighborhoods I am working in. I have written about this in previous posts so I will not repeat that here.

These new assessments will no doubt make homeowners rethink how they view their most expensive asset. With some areas declining in value, and others seeing increases, the real estate market can be confusing, however it can be simplified by considering the following points:

1) If your property assessment decreased then your taxes will go down which is good, however if it did not you might want to consider getting an appraisal to verify the counties information. Keeping up with local neighborhood sales can give you an idea of what is happening in your subdivision and provide support for your decreased assessment. If the houses are selling for less than they have in the past, your assessment may be wrong.

2) If you are thinking of selling your home, don’t guess at its value, get a current appraisal. I have seen folks list their home for what it appraised at several years ago. The market is not what it use to be. A great example is in the article I have referenced. One couple had their home appraised last year for $297,000 but was told the value would be more in the $230-$240,000 range, yet they listed it at $267,900. I’m sure it will sit on the market awhile before it sells unless they lower the price to reflect the current market. An appraisal will allow you to set a price that is competitive with other homes for sale.

Those homeowners that have further questions can reach me at 205-243-9304.

Why pay high property taxes? Get your home reassessed!

Tom Horn — Tue, 09 Feb 2010 15:50:06 +0000

It’s an unfortunate but true fact: property values are declining. With the number of foreclosure properties and short sales entering the market, property values have declined in most areas.

In the past a foreclosure sale, or other similar sale where the price is lower than normal, would not have been given much consideration because it was not typical in the market. However, because of the sheer number of these types of transactions, as well as the number of properties being offered for sale (i.e.-competitive listings), they must be considered. Prior to the decline, property values increased a great deal because of the real estate boom. This resulted in higher assessments and higher property taxes. What we have left now are the high taxes and low market value of residential real estate.

One way of making this work for you is to get your county assessments lowered to more accurately reflect the property’s true value and likewise lower your property taxes. This process varies by county so it is recommended that you check with your county to find out their procedure. The first step is to get an independent appraisal of your home so that you can see how it compares with what the county assessor has it valued at. It is important that the appraiser have the right credentials. This includes proper education, state certification, experience, and familiarity with the market area the property is located in. After the appraisal is completed you will need to file the appeal with the county you are located in. Depending on how complicated this procedure is you may want to have a real estate attorney do this for you. In addition to the filing, they can argue your case to the county and prove to them that you house is indeed not worth as much as the say it is. You may also be asked to respond to questions the board may have.

With a professional appraisal and a convincing argument it is possible your assessment and taxes will be lowered. This may seem to be a daunting task at first but if you do your homework correctly, it could pay off by saving you thousands of dollars in property taxes.