Chicago Appraisal Blog

I spoke with the Cook County Assessor's office yesterday and got some rather curious information.

I went online to appeal some taxes for investment properties.  In the online appeal section there is a place where you can simply appeal because you made a foreclosure purchase.  Great, I thought.  No need to pay another appraiser to come in and tell the assessor anything.  They'll just tax me based on my purchase price and I'll save a TON, right?  Wrong!

Interestingly enough, the gentlemen over at the assessor's office told me that the appeal I filed was meaningless because it was not an arm's length transaction.  (A transaction between a typical buyer and seller, not under duress, or with distressed property conditions, distressed conditions of sale, etc.)  "What is the purpose of the foreclosure button if you don't re-assess based on the foreclosure purchase price?" I asked. 

"Well, that's a good question.  I'm not really sure," the gentlemen replied.  Rather curious, don't ya think?

Basically, what I'm saying is, don't file online appeals using the foreclosure button.  It appears to be a lie.  It will not reduce your tax base at all.  The assessor's office was not sure why that buttom was there, or why a foreclosure purchase is an option for an appeal. 

Alternatively, I questioned if I may come in with current appraisals for consideration(2008 and 2009 appraised values).  They would consider those appraisals, but they will not consider appraisals that include short sales or foreclosures.  WHAT?  You mean to tell me that the market is experiencing a freefall in property values because foreclosures and short sales are the only sales out there.  Appraised values are falling 20%+, and in some neighborhoods, there are no regular sales, but the assessor doesn't care?

The gentlemen on the phone said that I raised an interesting point.  I argue that in a neighborhood where there are no arms length sales, how can you possible derive an assessed value without considering the short sales or foreclosure sales.  These new sales are establishing the new values because they really are viable buyer alternatives to regular purchases.  Regular sellers are having to knock 20% off of their asking price in order to compete with short sales.  Short sales are happening because foreclosure sales have pulled down the market.  I could go on and on, but the issue is, they matter!  In some neighborhoods, they are all that matter.  He suggested that I have the appraisals done and in the event that I am denied because the appraiser suggests that short sales and foreclosure sales must be considered to determine a value, I can take it up with the board of review.  "The county needs money, and if we valued on distressed sales we'd have nothing," he suggested.  Is that my problem?  Isn't the City of Chicago, Cook County, State of Illinois, etc..  taking a big enough chunk of my already dwiddled down real estate income?  Geeeeeeez.

The man on the phone did say that the Assessor is making an "across the board adjustment down", I just don't expect it to be in line with the reality of property values.  Don't get me wrong, I love living where I live, and I want the County to be solvent, but there really are neighborhoods in Cook County that have remained relatively stable.  The neighborhoods where the property values have declined have done so because of short sales, foreclosures, etc.  These happen because people lose their jobs, can't afford their houses, etc.  These are the people who need the tax break.  Excuse me, it's not really a "tax break", it's an adjustment down to reality.  I feel like the people who have lost $100,000. in equity because their neighborhood has high vacancies, excessive foreclosures, high unemployment, etc, should at least not have to pay tax on the equity they lost.  Is that crazy talk or am I on to something?

It should be interesting to see how this all pans out.  In the event that anyone needs an appraisal for a tax appeal, feel free to give me a call.  By the way, you may not be in a declining neighborhood, but if you are, it's probably worth the money spent on the appraisal to appeal the taxes.