Every few years, each community in Wisconsin is required to re-assess each property within their limits. Whitefish Bay is no different. Of course, if everyone's home increases in value the same percentage, the theory goes, our property tax bill shouldn't change. However, property valuation determines state aid for education and shared revenue, as WFB's property base rises relative to others in the state, our local tax levies increase. So it does matter.
While true, your property tax may not change with an increased assessment when every house has been re-assessed, it's still important to have your house properly valued. If it's lowered 10%, your tax, which is based on a mill rate multiplied by your value, will go down roughly 10%. A decent explanation of the estimation process can be found here, although it is for New York State, which may have different rules.
Six years ago, when I'd received my new assessment, I'd just happened to have a professional appraisal of my house. Since the official assessment was 15% higher, I met with the assessor and plopped the appraisal down on his desk, thinking I'd made my case and awaited a reduction. I got a reduction all right, a whopping 1% decrease. Hardly worth the effort.
So this year, when appraisals went out, and again, I believed my assessment was about 10% high, I went in to plead my case. And I did my homework.
I went to the WFB library to look at the "open book". It turns out, the book has just one piece of data: each home's new assessment. Why this Excel spreadsheet isn't published on the web, I know not. -- It does NOT have important home features, like number of bedrooms or bathrooms or size, and if you're going to make a case to the assessor that your valuation is too high, you need lots of data like that.
So I turned to the internet. There are a couple of decent sites (domania.com is one) that list home price sales, along with bed/bath, and square footage. Also, WFB's website has a link to all tax data, although this information is not particularly helpful in fighting your assessment. (The assessor later told me that all home data is pubic. I assume I could have done further research at the Village Hall.)
When I met with the assessor this year, I had many pieces of information to make my case. I do admit, though, I'm an ordinary joe on this subject, other than paying careful attention to the Real Estate market in WFB. -- First, I brought a list of comparable homes and their sale prices, all of which supported at least a 10% reduction in value. I also had a list of what I called, "Non-Comparables."
I thought the non-comparables made the best case. I assembled a list of 7 recent home sales that matched my assessment. I then showed that a house of that value had certain features which my house did not, namely, a 4th bedroom (mine has 3), usually a family room (I have none) and a 2-car garage (of which, I do not have.) The theory went, these houses sold on the open market for a certain value, meaning my clearly inferior home should be valued under them.
I also listed a specific home, an immediate neighbor had been assessed at $7k below my value, yet had an additional bedroom, an additional family room, and a 2 car garage, again, all things my home doesn't have, which made my higher assessment questionable. The assessor took my challenge and tried to tell me why this was so. "Ah, see here, that house has a C+ grade, yours is a B-". This was due, he explained, to my house having exterior stone, and my neighbor having wood siding. How that makes up for an extra BR, FR, and GA, still makes no sense. I'd swap houses with him in a heartbeat.
One other thing I learned, was that some homes were assessed at UNDER their recent home sale price. For example, a home that was sold recently for $350k was assessed at $338k. I asked the assessor how this could happen: While it is crystal clear that a home's value on the open market is its recent sale price, the computer doesn't think so. The assessments are all computerized. The system finds 5 comparable home sales, matched by square footage, BRs, BAs, etc, and tries to compute a new value for the home in question. While recent sale price matters, it's not the biggest factor.
Personally, I think that's one place the system goes wrong. The end
result is to determine actual value, and clearly, a recent home sale at
an arms-length is a perfect indicator of market value. The assessor
explained that actual home sales aren't the end number because, say, a
home buyer over-pays. The computer will smooth out their mistake. My
answer to that one is: tough cookies. At the instant you bought the
house, that's what you thought it was worth. No crying about it if the
Village thinks that's the value, too.
So after I left the
meeting with the assessor, I thought my chances were slim and none.
From what I learned in the meeting, these assessments were done by
computer, and since the data about my house (square footage, BRs, etc)
hadn't changed, the computer would spit out the same number.
Three
weeks later, I got my new assessment: It had been reduced 10%.
Hallelujah! On a $6k property tax bill, that should be ~$600 -- per
year. Well worth my time.
I have a guess as to why my appeal
was successful, although just a stab in the dark: When the computer
picks your comparables, I'm guessing it matches by many factors, but
price is one of them. So when you compare five $300k houses, guess
what? Your valuation comes out around $300k. The assessor said he'd
take the comps I listed (all 10% lower) and examine them. Perhaps he
forced the computer to use those as comps. Presto. My value came out
10% lower. The other possibility is that he understands more about my
house's marketability issues, i.e., I don't have a garage. How that
factors into the computer's analysis, I know not.
I'm not
suggesting the system is faulty. When dealing with an entire village's
housing, you need some systematic way to valuate, for expedience sake.
But I believe every homeowner should be vigilant. Take notice of sale
prices of homes on the blocks around you and compare them to your
house. If your gut feeling is different than the assessor's value, do
some homework. It's worth your time.
Unfortunately, many of
you may be reading this too late. The time to meet with the assessor
has past, and I believe so has the time to file an appeal. Mark your
calendar for around 2012, when it happens again.
