Update on status for refinance---not good

[taxman]

Well, the refinance project is not going well. The appraisers finally were able to do the appraisal and it did not come out well--we only appraised for $110,000 and in order to do the refinance, we need to come in at 80% which means we need to come in at $133,750. I was dumbfounded and so is my wife---especially since the doublewide is in BETTER condition than it was when we bought it new back in 2006. When we had the home delivered, the drywalls were not painted and we did that, in addition to adding a porch to the front. Everything is in excellent condition. We're challenging the appraisal report---according to the township where we live, our fair market value is $133,750 (which just happens to be the number that we need) and I've printed 5 different recent sales that are within the county of where we live---and they all sold for MORE than their fair market value. In addition to that, they're all similar properties: doublewide, garage, similar acreage, etc. Actually, in some of the examples, the doublewides are older than ours and the garages were built 20-30 years ago and are smaller in dimension. The lending officer at the credit union told me today that the underwriters are asking for additional "comps" (comparatives, I'm assuming) so maybe they're looking at our situation. I am bitterly disappointed---is there anything else that we can do? I think the appraisal number is bogus---especially when you compare the 5 different similar reports that I have.

[David Oxhandler]

Banks are using appraisers today that come in with low-ball appraisals. After the crash the banks blamed the mortgage brokers and appraisers and have yet to take responsibility for tanking our economy.

Even if the house is in better condition then it was in 2006 the value is likely to be less. 2006 was the top of the real estate bubble and everything was over-valued. Today every home is under-valued. That is the reality of a market economy. A few years from now, as the market is recovering, the value will approach the price you originally paid.

I know that will not help you today. At this point you need to fight for a higher appraisal with your own comps.

[taxman]

At this point, the comps are the only ammunition that we have. As I said, there are properties within a few miles that all sold for at least the listed fair market value on the tax rolls---and in some cases sold for more than the fair market value. Whether or not the appraisers will change their number is another story. If they don't, I will be filing a formal complaint with our state licensing agency. I don't understand a difference of over $23,000 between fair market value on a town tax roll and the value on an appraisal report. If that's the case, then all the tax roll numbers are grossly overstated and we need a reassessment done on our property to save on taxes. Unbelievable...

[David Oxhandler]

When used by a government for taxation purposes Fair Market Value is a misnomer. It is not always fair and it is not usual a true reflection of the market. The market is fluid and changes from day to day hour to hour and sale to sale. The only true Fair Market Value is that value determined in a moment by a public auction.

Fair Market Value is a historical fact. Appraised value is an educated estimate. Fair Market Value refers to a precise moment in time. The property could have been worth more or less up to the moment of sale, and it could become worth more or less the moment after sale.

Historically, Fair Market Value and appraised value have been very different numbers in most counties. Before the real estate crash most county property appraisers under estimated their Fair Market Value numbers. No one complains when the price base, for tax purposes, appears to be lower than genuine market price. Lots of taxpayers protest Fair Market Value if it is set too high.

We are in a strange time now, in as much as Fair Market Value has approached or exceeded market price in many local markets. During the boom as real estate prices soared tax authorities gradually but continually raise their Fair Market Value, and raked in greater and greater taxes. When the bottom dropped out of the real estate market, county tax authorities found their income in free fall. Fair Market Values have decreased dramatically but not always in tandem with local market sales.

I have purchased a few properties in the last year and successfully appealed for a lower Fair Market Value from the property appraiser, so I owed less tax. The majority of property's Fair Market Value are not challenged and the local governments are not anxious to lower them and continue the downward slide of county income.

Prior to the crash Fair Market Value was as low as one third of Market. It is very unusual that at this time property buyers can count on the tax man's Fair Market Value to be close to Market and a good starting point to negotiate downward.

Push the comps. it is the only real way to challenge an appraisal