Overpayment Conversations: I get phone calls periodically from property owners who think they overpaid for a house or parcel. After all, purchasing real estate often involves a combination of logic and emotion, and it’s usually the emotion part that drives us to pay too much.

Scenario 1: Most home owners I speak with about overpayment tend to say they overpaid by $5,000 or so to get the deal done. Honestly, even if there was an overpayment of $5,000, that’s an extremely minimal tax savings (about $50) that probably isn’t worth the time to pursue. In truth, don’t waste your time. Moreover, when a sale was on MLS and exposed on the open market for a reasonable time period, and there were other sales at a very similar level, the overpayment argument doesn’t have much support.

Scenario 2: However, there are cases where owners really do overpay by quite a bit. This tends to happen more frequently with unique properties, parcels, custom homes and all cash private sales off MLS that are not subject to an appraisal or strict lending guidelines to evaluate risk. Sometimes buyers and investors will overpay by tens of thousands or even hundreds of thousands of dollars. It happens and there are huge tax consequences too (overpayment).

How long can you appeal your “base year” value? In the case of legitimate overpayment, there can be tax relief for the property owner, but the owner can only appeal the “base year” value within four years of the date of purchase. After four years, there is nothing the owner can do to correct the base year value. In California the “base-year” or “Proposition 13″ value is the assessment level the Assessor assigns to a property when it is first purchased. All other years of taxation are “based” on this original assessment, so it’s definitely an important number. For example, if you bought a property for $500,000, and the Assessor determined market value was indeed $500,000 at the time, then your property taxes should not exceed that level in the future beyond an allowable 2% increase for inflation each year. Of course if property values decline, then your property should receive a temporary “Prop 8″ assessed value where your assessment is temporarily lowered each year to reflect the current market instead of the $500,000 market in the past when you purchased.

Money leaving your wallet: All things considered, if a property owner overpaid by $100,000 and the Assessor did not catch the overpayment, the property owner would basically be overpaying by $1,000 each year. Imagine doing that for 25 years in a row (that would equal 25-30K in overpayment). That’s why it’s important to act within four years in case there was a significant overpayment. All you would need to do is fill out the proper appeal form and supply support for a lower opinion of value for the base year between July 2 to November 30 of the calendar year (if relevant, this is what I can help you with).

I hope this was helpful. Please let me know if you have any questions, stories or scenarios to share with me (in comments below or feel free to call or email me).

When have you seen people overpay in real estate or retail? Are there are specific retail examples you can think of?

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Twitter, subscribe to posts by email or “like” my page on Facebook

What do you think? Any questions?

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitteror subscribe to posts by email.

Do you still have to pay your property tax bill at the higher level during an appeal? Unfortunately yes. This is often frustrating for home owners, but it’s the way the system works. Verbatim from the Assessor’s Office, “You must pay the original bill timely to avoid penalties, pending the outcome of the review or appeal.” Keep in mind Sacramento County will issue you a refund from your overpayment if your property taxes get lowered through the appeals process.

How long does it take Sacramento County to issue a refund after a successful appeal? Your refund should come within 95 business days. Don’t expect to be the exception either. You’ll get between $100-125 back for every $10,000 in property reduction. If you were overassessed by $50,000, for example, you would get $500-625 back in your pockets. From the Assessor’s website:

All offices involved in the property tax process (Assessor, Auditor-Controller and Tax Collector) are experiencing a historically large volume of these reductions. When the Assessor’s Office determines a reduction in assessed value is appropriate, a roll change is processed and certified to the Auditor-Controller, typically within 15 business days. The Auditor-Controller will issue a corrected tax bill within 20 business days and deliver it to the Tax Collector for further processing. If a refund of paid money from the original bill is required, it is normally issued within 60 business days after the corrected tax bill has been calculated. You should anticipate the assessment changes will take up to the full 95 business days to be processed.

Is it still worth it to appeal despite having to wait? You have to answer that question for yourself. I think if there is money to save, it’s absolutely worth it in my opinion, and the appeals process is the only way to obtain a reduced value (unless the Assessor reduces your property value automatically due to their own research). It may be frustrating to wait, but the alternative is to overpay taxes. I have successfully appealed my property’s taxes three times and I always enjoy getting a refund to check to keep my hard-earned money in my pocket. If I have to wait a while to get money returned to me, I can live with it.

I hope this was helpful. Let me know if you have any questions, check out other articles on property taxes and visit my property tax appeal website for additional information.

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

NOTE: The image above is a snippet of the ”Tax Change Withdrawal” form in Sacramento County. These forms sometimes leave home owners confused because property owners are fearful of what the form really means. After all, nobody wants to sign the wrong form and accidentally stop an appeal. But in this case the withdrawal at hand is something good because the purpose of signing the withdrawal form is to formally accept the revised value and thereby pull out from the appeals process. Read more here if you are wondering about signing the Tax Withdrawal form.

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

What do you think this means?

The following graph was added as a result of a great question by Jeff in the comments section. “What were property values doing during this time?” was the question asked. It looks like the 95757 zip code has seen a clear decline in property value over the past three years. Yet at the same time it’s important to note the rate of decline has slowed down from previous years.

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

According to the Sacramento County Assessor, “An “escape assessment” is a correction to a property’s assessed value on the local property tax roll. The correction is made because the Assessor’s Office discovered a property or a taxable event that should have been assessed but was not. Current and/or prior year tax rolls may be affected. The most common reasons for an escape assessment are overlooked or unreported new construction, a missed change of ownership… or the removal of an exemption.”

Why am I talking about escape assessments? I just finished up some property tax consulting work for an East Sacramento home owner who needed research for his property’s value over the past four years. I love this type of work because it’s exciting to analyze the market for a number of years to establish a value over time. In this situation the owner inherited the property in 2008 from a friend, but the Assessor’s Office was not informed at the time of the death of the original owner, which should have triggered a reassessment. When the Assessor discovered the death and change of ownership, they sent the new owner a “Notice of Proposed Escape Assessment”, which basically means the Assessor’s Office enrolled new assessments for the property for the past four years. The home owner can appeal the values within 60 days of the issuance of the notice. Since the owner disagreed with the value put on the tax roll by the Assessor for 2008-2011, he hired me to show what market value was during each of these respective years.

NOTE: In situations like this the owner can appeal property taxes for multiple years in the past, but that’s not the case in typical “decline in value” situations. If you have been overtaxed for the past several years, for example, but you did not formally dispute your property taxes at the time, then there is nothing you can do once the appeals deadline passes on November 30 of the given year. All you can do is wait until the next year to appeal your property taxes.

Does that make sense? Let me know if you have any questions.

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Two reasons to AVOID paying someone to reduce your property taxes before July:

1) Assessments are Published in June or July: The Assessor historically doesn’t publish their assessed values until the second quarter of 2012. Every year tax companies send mailers in the early part of the year promising to reduce property taxes, but how can they offer to reduce your property taxes in February or March if they don’t even know your assessed value? Moreover, the Assessor does actually review property taxes and they might catch your overassessed value and correct that before their assessments are posted. Again, why pay someone if the Assessor could potentially get it right anyway? Ultimately a company can easily claim they “helped” you when in fact the Assessor simply got your value right and would have adjusted it regardless of the “help” you received.

2) The Appeals Period is July to November: The formal period to dispute your property taxes is between July 2 to November 30 of any given year for most counties surrounding Sacramento (besides Placer, which is July 2 to mid-September). Why hire a company in March when the company cannot formally dispute your taxes until July? First see what the Assessor says your property is worth and then make a decision about whether to appeal or not once you see your property’s value. The value should be based on January 1, by the way.

Here is a video with the same information above if you wish to listen instead:

I know a post like this sounds very self-serving since I run a property tax appeal company, but this is truly about honest business and providing good tips to save money. I sincerely want property owners to not be taken advantage of as I mentioned above.

What should you do? The best case scenario is for you to wait to see how the Assessor values your property for 2012. If the value looks too high come June or July 2012, and you don’t know how to provide support to show a realistic value, then hire a reputable company to handle it for you. If you want an email reminder when property assessments in Sacramento County are released, click here to fill out the form on the sidebar and I’ll send you an email reminder so you can remember to check your property taxes come July 2012.

Was that helpful? I hope so.

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

• Assessed value of 9 appeals: $2,855,247
• Market value of 9 appeals: $2,197,000 (23% lower overall)
• Largest overassessment percentage: 49% (a condo)
• Largest overassessment amount: $161,288
• Total potential savings for home owners this year: $8,228

This last bundle of appeals will be turned in today since November 30 is the deadline for disputing 2011 property taxes in many counties surrounding Sacramento (only for “decline in value” situations though – not all tax scenarios such as calamity reassessment). As the authorized agent for each home owner, I’ll be handling discussion with the Assessment Appeals Board in coming months and then the appeals hearing too if necessary. All things considered, the home owners are very happy and I even received some really encouraging feedback today that I wanted to share with everyone (the owner said it was okay to post). This made my day. Pretty cool, huh?

“Your report goes far beyond anything I could have imagined. As a former VP of Real Estate at a major East Coast bank, I’m very impressed. Add-in your quick turn-around time and initial e-mail response and I couldn’t be more pleased. Thank-you so much.”

What do you think about the stats?

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Here’s the deal. If your property is currently assessed for less than true market value, the Assessor can increase your assessed value by 2% per year even if property values are declining (so long as the assessment does not go above the Prop 13 value of course). This can be very frustrating for a home owner, but it’s legitimate in many cases. Keep in mind though that the tax bill includes property taxes, but also direct levies, benefit assessments, and delinquent utilities, which could also be a reason why a tax bill has increased by more than 2%.

On the other hand, sometimes home owners don’t pay attention and this type of normative 2% yearly increase is occurring when in fact there should be a huge decrease due to the downward real estate market. For example, I am working with a Folsom owner who has seen an increase in property taxes over the past three years, yet values in the neighborhood have plummeted to the point where the house is overassessed by $150,000 (yet assessed value is going up each year).

Moral of the story: Pay attention to your property taxes and market value. An increase may or may not be legitimate based on your situation. Know your circumstances and watch closely. If you would like for me to look into your situation to see if there might be a discrepancy between your assessed value and market value, give me a call at 916-595-3735. The deadline to dispute property taxes in Sacramento County is November 30, 2011.

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

I just finished a tax appeal report for a home owner in Fair Oaks. His property is assessed at $281,873 and has been assessed at that level for the past three years. He originally purchased the property in 2003 for $292,000. All things considered, after a detailed analysis, market value on January 1 was actually $150,000, which is $130,000 less than the assessed value. This means the owner was scheduled to overpay by $1,648 this year (he easily overpaid these past two years also by $2,500).

Life is full and there are so many things to stay on top of, so it’s understandable to not pay attention to property taxes. However, think in terms of the exodus of greenbacks from your wallet that should be staying comfortable in your pocket. This home owner easily overpaid $2,500 over the past two years and was scheduled to overpay another $1,648 this year had he not contacted me. How does giving the county $4,000 of YOUR money sound to you?

Remember the deadline to dispute property taxes in Sacramento County is November 30, 2011. Contact me and I’ll be glad to explain how the process works and take a preliminary free look into your property to give a professional eye to your situation. By the way, you can look up your property HERE to see how the county has assesed you (your value should be based on January 1). The tax appeal world often feels like foreign territory for many home owners, so let me at least give you insight into what to do and how to do it. I typically charge $99 for a very solid appeal report that includes multiple trend graphs of your neighborhood, a market analysis, the best comps and the worst comps too if need be. You should only hire me or someone like me if there is a savings to be had though. Don’t waste your money on a report that is not needed. Whatever you do, pay attention.

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

My advice from experience? You can try to turn in the Decline in Value form to the Assessor, but if you have not heard back as of October or early November, proceed to file a formal appeal. In truth, I rarely recommend the Prop 8 form at any time because most people are busy or November 30 is approaching too quickly. However, since the Application for Changed Assessment will cost you $30, some owners prefer the Prop 8 route first. The Application for Changed Assessment used to be free, but two years ago a fee was instituted, which means appealing your property taxes in Sacramento is not really free of charge. Along with the application you MUST submit evidence for a lowered opinion of value for January 1, 2011. Be realistic and support your value conclusion. If you know what you are doing, great, but if you need help, contact my tax appeal company and we’ll take care of you for only $99.00 (fee goes up in November). Our valuation report consists of a description of your property, the best comps, the worst comps (if needed), graphs of all sales in the market, a graph of competitive sales and a description of the real estate market as it pertains to your property.

Know the Difference: Whatever you do, please know the difference between these two forms. Every year I talk with home owners who thought they appealed their property taxes, but they only filled out the Prop 8 form. Remember, once the Assessor looks at the Prop 8 form, they may or may not get back to you and they do not have to bring your case to an appeals hearing either. In contrast, the Application for Changed Assessment will ensure your right to hear back from the appeals board and to eventually take things to an appeals hearing if need be.

Does this make sense?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Good or bad advice? I sometimes hear advice from real estate professionals for home owners to make a list of what neighbors pay in taxes, but this isn’t good advice to follow for reasons listed above. The Assessor even states on their website that “only open market sales that occurred before March 31, 2011, can be used to review your 2011-12 value” (not your neighbors taxes). While it may seem to be a secondary form of value support in certain cases, the best thing you can do is provide solid comparable sales between January 1 – March 31 of the given year. Or even provide sales between September to December of the previous year in addition to January to March. Hard facts such as sales from the market are worth way more than saying “but Joe next door pays less than me and I should pay less too”.

If you have any questions or you need help with the tax appeals process in Sacramento County or a surrounding area, let me know. I run a property tax appeal company and I’m always happy to help answer questions.

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

What do you think of the graph? What trends have you seen in Folsom lately?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.