Functional Obsolescence is Missing In Action

Property tax appraisers are cheating by keeping one eye closed.

We all believe some type of property tax reform would benefit us. The difficult part is determining which type or types that would be. After all, we know if we simply reform to lower what is paid, we may inadvertently hurt a program or service we count on. If we knew of an area of reform that would simply eliminate being illegally cheated on our property taxes, would we even act on such knowledge? Only you can provide that answer. I know I have, and each since, I continue not subsidizing the tax bills of those that can afford to pay their fair share.

If you own taxable real property, you can safely bet your property tax appraiser is cheating you. Intentionally, unintentionally, or both, would be the only debatable issue, yet it exists.

Item(s) that should be considered in valuing your property are listed inaccurately or in other cases, not listed. Before retiring as a professional real property appraiser, and property tax appraiser, I found so many errors and omissions; my head-shaking could have become viewed as a habit.

Think back to the last time your property was valued by the tax appraiser. Did (s)he inspect the interior of your home? Probably not.

If a person did visit your property, did (s)he come to your door? Did (s)he introduce (herself/himself as an appraiser, or as a lister…possibly an employee of XYZ on behalf of your property tax office?

In today’s fast-paced world of CAMA and AVM, “drive-by” appraising is increasingly prevalent. Information about your property will be dug out of more rabbit holes than you can imagine. No matter where the data comes from, it also requires human input. I found a tax card showing an average quality ranch house having 25 bathrooms. That would be a case of functional obsolescence! Though it clearly was intended to be input as 2.5 (two full bathrooms plus a half bathroom) bathrooms, the error caused the indicated value to be too high. The property owner had no reason to a spot the error.

Older houses are prime candidates of MIA functional obsolescence. In times-mostly-of-old, it was not uncommon for the homeowner to perform their own repairs, remodeling, and even constructing additions. Architecture designed building plans were, at times, passed-over for pencil and napkin drawings. Are you laughing? I’ve seen some.

So, why would functional obsolescence be overlooked so often? If it exists, the appraiser should not be using CAMA or AVM to value the property. That creates an issue most appraisers prefer to avoid. Thus, if they observe any form of functional depreciation, they close an eye and ignore it. After all, in their closed eye’s mind, it never existed.

The property owner is cheated. Time for some honest, pain-free, property tax reform.