Will Alabama Property Assessments Ever Include Foreclosure Sales?

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.

Comments

  1. Michael S. Bolton says:

    Great post Tom! It reinforces the fact that we just report what the market is saying. I’ll definetly use this as reference when I need to point out why I’ve used distressed properties.

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