An Appraiser's View

Do you look at your property tax bill and wonder why it keeps going up every year? Although a percentage of the increase is likely due to government imposed and voter approved “fees”, the largest increase is most likely due to an increase in your assessed value. This is especially true if you have owned your home less than 10 years! But what is assessed value, where does it come from, and is it accurate? Great questions, I’m glad you asked!

1st off, no, it is not accurate, nor is it intended to be. Here is why. Assessed value is the value your home is given by your county assessors office each year. The value can be developed by the assessor’s office by utilizing data from various sources, such as the price you paid for your home, adjusted for the average yearly market increase in your market area, improvements to your home or site derived from county building permits, and/or a “mass appraisal” of homes in your market by the assessor’s office staff appraiser. None of these include an actual inspection of your home nor do they currently have access to any appraisals completed on your home for any purpose. Therefore, it would be impossible for them to be precise in the development of your assessed value. This also why appraisers do not use assessed value as a data point when developing an appraisal (yet online valuation models rely on them, but that’s a different blog for a different day)

If you disagree with your property tax bill you can file an appeal with the assessor’s office and they will review your tax assessment, but they will not inspect your property, therefore a tax appeal is most successful when it includes a full appraisal by a licensed appraiser. We are an unbiased 3rd party with no interest in the outcome of your appeal, so the assessor trusts our opinion. Because we are unbiased, telling an appraiser what you need the property to appraise for should cause the appraiser to recuse themselves and refer you to a new appraiser. An appraiser’s job is to provide an opinion of value, not a high one, not a low one, just one that reflects what the market indicates your property is worth. There is however a way you can influence the appraiser’s opinion of value to be lower. Here’s how.

Complete the following steps before the appraiser arrives & it will affect the opinion of value of your home.

  1. Let your pristine landscape and hardscaping go. I’m talking dead plants, shrubs, knocked over tress, 2’ tall overgrown lawn with weeds. Take a jackhammer to sidewalks, patios, and retaining walls, and cause some real damage! You could even make a little extra cash by allowing contractors to pay to dump their construction debris all over your site.
  2. Do not clean your house for at least a month. Leave dishes, dirty clothes, mud, etc. where it is. Don’t take out the trash, let it pile. Stop by some yard sales and get free items to place throughout the house. Pile the floors with junk high, the counters even higher. Do not leave old food in the fridge. Appraisers don’t look inside the fridge and honestly, that’s just disgusting.
  3. Destroy your flooring. Bring an engine into the living room, get oil and grease on the carpet, leave an oil pan out with oil in it and a few parts laying on the floor.
  4. Decorate your walls with custom graffiti. This one can be fun! Get those old cans of spray out and go to town! Just make sure you are not artistic; a good Disney mural might have the opposite effect on the appraisal. A few well positioned holes in the drywall are always a good negative value impactor.
  5. Make it appear your roof is failing. You don’t have to destroy your new roof, just run a hose into the attic, attach a sprinkler, and let it run for a couple hours every day for a week. The damage will be extensive and should give the appraiser cause to make an assumption the roof is in need of replacing (along with the drywall, insulation, flooring, and well, maybe the entire roof depending on what the sprinkler hits)
  6. Have a kitchen fire! Go ahead and start a fire on your stove. Let the smoke damage your entire house. Do not clean it up. Do put out the fire though.

*Note* The above recommendations are both tongue in cheek and based on actual experiences I have appraising homes. Please do not do any of them. The cost to repair will outweigh any tax savings by tens of thousands of dollars.

Next week’s blog is “How to increase the value of your home by $5,000 with just a $10,000 investment!”

The point is if you need an appraisal for any purpose, tax, refi, estate, or divorce, improvements (or dis improvements) to your property aren’t necessary as they typically do not result in enough of a difference to warrant the cost of the improvements. Appraisers are also trained to “see” things that impact value, both positively and negatively, without you having to stage your home.  

If you need a tax appraisal for appeal, or just valuation for an estate, don’t damage your home! Give us a call today @ (916) 303-0960 and get an unbiased opinion of value. A valuation you can rely on.

"We Value Your Home" Tm
5693 Sparas Street
Loomis, Ca 95650
Cell (916)303-0960


Posted by Jeff Pickerel on December 30th, 2023 6:04 AMLeave a Comment

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Ok, now that I have your attention, no, the market is not declining in most areas, but I guarantee you it will. When? Well, if I knew the answer to that I would be sipping a beverage on the beach of a tropical island instead of trying to help people prepare for the coming market decline. That said, when asked, my magic 8 ball responds with "Without a Doubt" and "You may rely on it" instead of the  "Cannot predict now" it was coming up with just a few months ago. Given the accuracy of the 8 ball I myself have decided to prepare for the decline. I recommend you do the same. 
But how do I "prepare" for a market decline? I recommend three things. #1 Refinance out of a variable rate 1st mortgage. #2. If you have a HELOC balance either pay it off or refinance it into your 1st *Note* If when refinanced you will not be able to afford payment do not refinance. and #3. If you are considering investing in distressed sales by tapping into your home equity, increase the value of your home so you can get the lowest rate possible on monies borrowed. 
Which brings us to the meat and potatoes. How do you increase the value of your home in a declining market when with a few exceptions, remodeling currently  increases home value by only 70%-85% of the cost? Yes, I have seen all the tv shows and even know a few contractors who specialize in flipping properties. They have a spreadsheet that shows what they paid, what their costs were, and how much they sold it for, usually showing a 15-20% flip profit. But they are leaving out two important parts of the formula, their own labor costs and the time factor of an increasing market. (The home would have increased in value during the time they were remodeling whether they remodeled or not). Plus, if they are acting as the real estate agent they leave their 3-6% sales commission out as well! When these are added profit usually drops down below 10%. Which means the exception is, if your home is in need of repairs and/or significant updating, taking care of your home maintenance, finishing those projects, and updating your home can increase the value by as much as 10% in a declining market!  
My magic 8 ball says the market decline is coming "Without a doubt" so my advice is don't wait. Prepare your home today. 

Posted by Jeff Pickerel on September 21st, 2022 3:25 AMLeave a Comment

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