In most counties only home sales that were “arm’s length transactions” can be used as evidence during a property tax appeal. So what the heck is that?
Selecting the correct comps for a property tax appeal means reading a lot of fine print from the county assessor rule book. Many of the comps you or your real estate agent might find online or in a typical multiple listing service (“MLS”) report would NOT be allowed in an appeal hearing. Similarly, most real estate websites that offer an estimated valuation for your home will include comps that would be disqualified during an appeal hearing.
For instance, in many jurisdictions many types of sale transactions can’t be used as comps in a property assessment appeal because they are not 'arm's length transactions', though some jurisdictions do allow them. ValueAppeal researches these unique rules in each county we service so you don’t have to. If you’re appealing your assessment on your own without ValueAppeal’s help you’ll need to determine which sale transaction types are allowed, and which ones aren’t, in your jurisdiction.
Types of NON-arm’s length transaction property sales:
1. Homes that sold as part of a foreclosure.
2. Homes that sold as part of a “short sale”.
3. Homes that sold as part of a divorce settlement.
4. Homes that sold as part of an inheritance.
5. Homes that were sold to a non-profit charity.
6. Homes that are disqualified for many other sneaky reasons the appeal board uses. The rules vary by jurisdiction, the list above is just a sample.
As you can see, when you’re reviewing the list of comparable sales for your home that you found on another website, or received from your real estate agent, you need to know if any of them were non-arm’s length transaction sales or not. Unfortunately many lists of comps you might receive do not note which sale transactions were “arm’s length transactions” and which ones weren’t.
How are you supposed to know whether the comps you want to use in your appeal would be disqualified in an appeal hearing? Its tough. For that information you might have to call the county assessor and ask about each transaction on your comp list. Some say the process is designed to put the homeowner at a disadvantage to discourage appeals.
Or you could use the ValueAppeal property tax appeal software to create your appeal evidence report instead and this time consuming research is done for you. We only use comps that are considered arm’s length transactions.
Do you think homeowners should be allowed to use foreclosures and short sales from their neighborhood as comps for evidence when filing a property tax appeal?
