THE RISK FREE WAY TO MAKE HUNREDS & THOUSANDS OF $$$$DOLLARS$$$

Want a risk free way to potentially make thousands of dollars? A way so easy it’s like finding a cache of hundred-dollar bills lying on the ground.

Protest your real estate taxes.

You’ve got nothing to lose. It’s like playing the lottery without buying a ticket and with tremendous odds of success. For most people who own property it might just be the easiest way they’ll ever have to make money. Yet they ignore it like the plague.

Folks clip coupons, chase down sale items, mow their lawns, style their hair, and pretend they know how to cook, just to save a few precious dollars. Yet they walk away from literally hundreds and thousands of dollars each and every year by not protesting their taxes.

Why? Is it too much trouble? Is it too intimidating? Are they not familiar enough with the process to make it work? Or, are they afraid of repercussions from Big Brother?

Firstly, the amount of effort you put forth is small in comparison to your potential reward. It’s not difficult; you simply have to gain a little familiarity with the process and your set for life. Once you have done that, you’ve acquired the skills for a lucrative part-time job, once a year.

Secondly, the intimidation factor is usually low. After you become familiar with your rights and options under the law, you’ll have the confidence and ammunition you’ll need to go face-to-face with the bureaucrats that are holding your money hostage. Once you’re armed with a little knowledge, you’ll have the ability to make Big Brother squirm and do your biding. Besides, there seems to be a growing trend of consumer friendliness among many government entities as they try to dispel their past uncooperative reputations. Big Bro seems to have gotten a whole lot friendlier. He hasn’t bitten off a head in years.

Lastly, the risk factor is zero, as far as I can see. You have nothing to lose. Protesting your taxes can only lower your tax bill, not raise it. Even if you’re totally unsuccessful, which I’ve found unlikely in most cases if you’re prepared with a sound argument; you walk away without any bruises or broken bones, not even a skinned knee. All you’ve lost is a little bit of your time. And, in the process, you’ve gained an understanding of how the system works and how to better utilize your knowledge in Round Two in the following year. Just like Arnaaald; “You’ll be back”, and better armed next time.

So, now that you realize a tax protest is well worth your time, how do you get started? To begin, you must gain a basic understanding of the protest procedure and the guidelines under which the value of your property is supposed to be determined. This will vary somewhat from area to area, but the principals will remain the same. If you move from one county or state to another you may have to re-educate yourself on the peculiarities associated with a new appraisal district, but the basic concepts should be similar.

The How To

So, let’s get started on our real estate appraisal protest.

Real estate tax protest requests are due by a certain date. Determine yours. For example, in my area it’s May 31 of the year in which the taxes will be paid. Protest requests must be received before that date to be eligible. If you miss that date, the games over and Goliath wins before you can even pick up your slingshot.

Send your intention to protest by certified mail or hand carry it to the taxing authority and request a receipt. Make sure your request is filed before the due date. Even if you think there is only a possibility you’ll want to protest your real estate taxes, file a request. You can always cancel it later without penalty if you find you have no basis what so ever to base your protest on.

File as close to the deadline as possible. I have a theory, from past experience that suggests that appraisal protests get easier later in the appraisal protest season. Maybe it’s because the total valuation goals have been met and the required taxes to meet the current budget are satisfied. Or, it could be that the appraisers are just so beaten down that they’ve lost their will to fight.

Who knows, but if it isn’t just coincidence, your interests would be best served by filing your protest as close as possible to the appraisal protest due date. Since appraisal protests are usually heard in the order that they are received, this seems to better position your appraisal protest meeting later in the appraisal hearing stage. It couldn’t hurt and just might increase your chances of achieving a more satisfactory result.

Next, while you wait, perhaps months, for your date with the appraisal board’s representative, you need to do a little homework.

Objective Opinions

First, establish the basis your appraisal district uses to determine the value of properties within its’ jurisdiction. Typically it is the market value on a specific date. Mine is January 1 of the current appraisal year. You’ll need to develop YOUR own idea of market value that is as close as possible to that specific date.

I emphasize YOUR market value because market value is often a very SUBJECTIVE thing. It is supposed to be OBJECTIVE, but in my opinion seldom is. In reality, I believe five different appraisers would find five different appraised values for the same property. It is not supposed to be that way, but it is.

Appraisals for a specific property are SUPPOSED to be based upon comparable properties, in comparable neighborhoods, selling under comparable market conditions. That’s what they teach appraisers in ‘appraisal school’. The problem is, everyone’s perception of ‘comparable’ is a little different depending upon their own beliefs and depending heavily, in my opinion, on the source of their funding. You see the U.S. Congress isn’t the only one influenced by special interests. Money makes the world go round and round and does influence ‘objective’ thinking.

To illustrate why appraisals can be so diverse, let’s look at an example of the appraisal process. Assume an appraisal is being requested by a large home project developer for submission to a hungry bank to secure financing for the sale of homes within a subdivision. The bank stands to make a lot of money if the financing is approved as a result of adequate appraisals. The developer stands to make an even larger amount of money in direct proportion to the value he can get the appraiser to come up with and the bank to finance.

If the bank requests the appraisal, it will be more conservative because they want to adequately secure the loan with enough collateral. But, because the developer represents a lucrative source of business, it may still be high. If the developer requests the appraisal, it will probably be even higher, reflecting his desire to carve out a larger profit. When they compromise, because their interests are similar and parallel, the resulting value will probably be high, in their mutual interest. In my opinion, this is why new subdivisions are often appraised and sold in excess of their true market value.

Of course, the ‘unbiased,’ ‘independent,’ ‘certified’ appraisers, needing a source of steady income ‘might’ just be ‘slightly’ influenced to skew the numbers to favor their sponsors. The comparables they use to justify their values ‘might’ just come from other higher value subdivisions. Since they are developing values for a new market with no direct comparables, they have the ‘flexibility’ to choose other similar neighborhoods for comparison. They develop their own OPINION of value, which just so happens to coincide with the bank and developers.

On the other hand, let’s assume a bank has lots of business on the lending end. They can be much more selective in their loan criteria. An individual with only the ‘power of one’ requests a loan. The bank requests a conservative appraisal. The appraiser, who possibly receives much of his income from the bank, uses comparables from the lower spectrum of available sales to justify a lower appraisal that is safer for the bank in the event of default. Thus, the value is skewed in the other direction toward a lower appraisal.

So there you have it. The supposedly objective appraisal process can quite easily be influenced by differing OPINIONS of value.

Everyone has an OPINION of value. You need to have one too. The appraisal district has an opinion of value, ‘independent’ appraisers have their opinion of value, banks have their opinion of value, sellers have their opinion of value, buyers have their opinion of value and your Aunt Edna has her opinion of value. Each have their own selfish perspectives for determining value and thus value will vary.

Presenting Your Value

Since value is SUBJECTIVE as often as it is OBJECTIVE, it is in your self-interest to determine YOUR OWN OPINION OF VALUE that has your interests as its’ basis. If you were selling your home you might look for high appraisals, but since you are trying to lower the amount of your property taxes, you should be looking for comparable properties with low selling or appraised values.

You should be looking for ‘comparable’ properties that have sold as close to your appraisal date, (i.e.; January 1^st of the appraisal year) as possible. Remember, your comparables are supposed to be based upon other similar properties, in similar neighborhoods as close to your property as possible.

Comparables should be sold under ‘fair market’ conditions, as close to average conditions as possible. Thus, foreclosures, special financing sales or homes with structural problems are not supposed to be included. However, these types of situations are not always evident and aren’t generally in your best interest to overly analyze. Just be aware that the appraisal district representative that you will meet with might be privy to more information than you and kick out a couple of your comparables because they don’t meet fair appraisal criteria. Just have enough favorable comparables to bolster your case should some become disqualified.

Use the appraisal system’s own records and realtors to research the prices of comparable properties. The appraisal district staff will explain how to research their database in person or you can utilize the Internet to peruse what other properties have sold for and have been appraised for from the comfort of your home. Realtors can provide historical data typically over the past year from their multiple listing systems.

There are two ways to approach a realtor for information for your tax protest. First, you can be direct and simply explain that you are protesting your taxes and need comparables in nearby areas. If they are not busy, some will accommodate you to develop good will in the hope of getting your business or that of a referral. Secondly, you can approach a realtor with the prospect of buying a home in the area of the property you are protesting.

Indicate to him or her that you would like a listing of the homes that are for sale and, to establish value, a listing of homes that have sold in the immediate area and nearby areas over the past year. Typically, you will be provided with a long detailed listing with all the information you’ll need to establish lower priced sales and protest your taxes, all gratis of your local Realtors-R-Us.

Fair Is Fair

Now, move into phase two of your research project, the second way to protest your taxes.

The law says appraisals should be fair and equal. If you have the same exact home as your neighbor, then you should be appraised at the same value and accordingly pay the same taxes. It just makes sense. However, due to the imperfection of the appraisal system, this is seldom the case. Often you can find other properties that are the same or similar with appraisals higher or lower than yours. Like properties should receive like appraisals. Unequal appraisals thus present an opportunity to further protest your taxes.

Using the appraisal systems own records you can research other similar homes in your immediate and adjoining neighborhoods and identify properties appraised lower than yours. This can then become a basis for a value reduction.

Your interest should be in finding as many properties as possible that even REMOTELY resemble a comparable to your property that have sold below the appraised value of your home or are appraised lower. If you can’t find properties in your immediate neighborhood go to an adjoining or close area for comparables. If you can’t find other properties that have the same features, find those that are as close as possible with square footage close to or in excess of yours. Larger homes with more features than yours provide convincing evidence of inequality. They’ll give you good reason to stand up and scream “discrimination”!

Square footage will probably be the most important determining factor in developing comparable properties that are appraised less than yours. Features and condition of the property will not be as noticeable or as significant to someone casually reviewing the statistics on comparable properties. Use this to your advantage.

Present YOUR viewpoint. Let the appraisal district’s representative be objective. You’re like an attorney for O.J. Simpson, you’re not there to play judge or jury, you’re just there to make sure the ‘glove doesn’t fit’ and that your property value is questioned and lowered.

How do you do that? Make sure that the preponderance of evidence is on your side. Collect as many comparable lower priced properties that have sold in the target time period as possible. Collect as many comparable lower appraised properties as possible. Overwhelm them with numbers to show that the lower prices you have found are not a fluke, but more the norm. If you have enough low priced comparables, delete the upper end of the spectrum so that you reflect just the lowest priced sold properties, thereby establishing the perception of lower value. However, leave enough properties to compensate for those that may be disqualified by the appraiser.

Don’t worry about presenting a balanced analysis of sales and appraisals. Your appraisal district representative will have plenty of other data to average out and water down your lowball valuations. You’re there to shake up the system a bit by lowering the representative’s expectations of value and then be willing to negotiate a compromise somewhere between their reality and your lowered perception of reality.

Your job is to present the case that your property is appraised too damned high and you feel cheated. Put on your ‘indignant’ or ‘victim’ face and wear it proudly, at least for the duration of your meeting... more>>>

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