Appraisal Matters

Some jurisdictions require the petitioner in a tax appeal case to prove that a property is unfairly assessed in relation to other properties . We appraisers call this tax comparable analysis and it’s done on a price per square foot basis.

There are many problems with tax comps. It is not uncommon for one or two assessors to assess an entire area, so if they get it wrong, they get it wrong for many or most of the properties. It is not uncommon for properties to have a much wider competitive radius, so limiting tax comparables to just those in a small area can overlook localized external obsolescence from the submarket being less competitive than others. Comparing the assessment per square foot of comparable sales (not just unsold local properties) done by different assessors, sometimes in different counties, can result in an assessment per square foot range that makes no sense. Lastly, it’s an uphill struggle to make a case that a property has excessive physical or functional obsolescence when the assessment per square foot seems uniform and "fair" compared to other properties.

John Simpson, MAI