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I just purchased a duplex and the counties valuation is $46,600 more than the appraisal that my lender ordered. I really would like to get this lowered because there is no way it's worth what the county is saying.

What do I need to do? What's the best way for me to get it lowered?

Any advice is very much appreciated!

Thanks.

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  • Can you give more information about the locale involved? – NL - Apologize to Monica Feb 5 '14 at 19:51
  • It's in South Carolina and the duplex is in a single family home zone. There are really no other comparable multi-units in the area. – ianbroad Feb 5 '14 at 22:03
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There is no relationship between the government appraisal and the mortgage appraisal.

The loan appraisal is done by a lender to determine if the property value is in agreement with the loan amount.

The government appraisal is done to determine how much to charge you in taxes. They use the values of residences and commercial property to get their operating budget each year. They also set the rate to generate the amount of income money they need. If they cut all appraisals in half, they would just double the rate.

In some jurisdictions the government appraises every year, in other places every three years. Some only when the property is sold. In some jurisdictions the maximum increase or decrease in government appraisal is set by law. But then they reset after the house is sold.

That being said. Use this time to review the appraisal from the government. They may have facts wrong. They may think you have a pool, or more bedrooms or a garage, when you don't.

Some jurisdictions use an automated process, others do a more detailed/individual process. If there was a mistake ten years ago with the description it will never get caught unless you complain. Check with the governemnt website for how to appeal. Some have windows of opportunity for an appeal.

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You most definitely can appeal the county's appraisal of your property. How to do so, and your odds of success will vary widely by your location, but I have successfully appealed the valuation on one of my rental properties.

I asked my realtor to provide me with recent sales of comparable homes in the neighborhood & provided them along with my appeal as evidence of what I felt a reasonable valuation should be. One of three things will happen: 1) Your appeal will be accepted, 2) It will be denied, or 3) you will be asked to come in & plea your case in front of the county assessor. In my case, the county accepted my appeal without needing to testify.

Look around your county assessor's website ... you will probably be able to find the form necessary for filing an appeal. If not, give them a call & they'll tell you the procedure.

The county generally uses a simplistic statistical model to do their valuations. Little to no human time is spent reviewing your home's value, so it's quite possible for their valuation to be unreasonable.

An appeal can take a bit of time & paperwork, but can definitely be worth the effort if the county's valuation is way off.

Hope this helps!

@mhoran_psprep Your point is well taken that in practice the relationship between sales prices & tax assessments is a bit more tenuous. The waters get muddy when property values have a large swing (like the past 5 years). When tax assessor's started seeing large drops in property values during the recession (and consequent drops in their budgets), I'm sure there was considerable pressure to prevent wholesale decreases in tax valuations. It's politically easier to "prop-up" falling valuations than to raise tax rates. However, the fact remains that the models that assessors use in determining property values are based on sales history - thus, I believe (and have found) that recent sales can be a persuasive piece of evidence in a property tax assessment appeal.

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  • Why the downvote? I haven't personally gone through the process, but this is my understanding. – MrChrister Feb 5 '14 at 20:10
  • one issue with answer is it makes the assumption that tax assessment == sales price. They are unrelated. You have to compare your tax assessment with your identical neighbors tax assessment. – mhoran_psprep Feb 5 '14 at 20:56
  • @mhoran_psprep - I read that as he got comps from the realtor as a basis for making the argument. I see your point, but I didn't read it that way. Jacob would you clarify your answer? – MrChrister Feb 5 '14 at 21:23
  • Updated my answer in response to these questions. (Was too long to put in comments, plus I felt it adds to the quality of my answer.) Good dialogue! – Jacob Feb 10 '14 at 15:52
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The question is whether the assessment is in line with surrounding homes. If my 1500 sq ft house on 1/4 acre is assessed far higher than a similar sized house/land nearby, I'd have a case. +/- 10% can be for age/quality, but 25% or more, I'd investigate.

mhoran is right, values for different purposes need not align. A start would be to use a service like Zillow which offers property tax information, as well as house sizes. Let us know what you discover. Welcome to Money.SE

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