Property reassessed - should I fight? how?

Question

Hi, all,

My rental in Wilmington was just reassessed. I looked at Zillow and all of the recently sold properties in the neighborhood have gone for significantly less than the reassessment. Should I fight it? I feel like based on the recently solds in the area, the assessment is about thirty thousand high.

On the appeal form, you have to state whether the property is a rental or my home. Do I risk triggering some tax or unforeseen consequence by filling out this form?

Thanks!

William Murrell · Answer

Sold comps are public record so they won't really care where you got the data.  I'd fight it.  Come to them with a list of reasons why they're too high and make your case.  Worst case scenario: they enforce it and you're no worse off than you are now.  I know several people who have fought it and won, but I also know some people who fought and lost.

They don't really care if you're an owner occupant.  The only parties that care whether you live there or not are the lender and your insurance company.  Depending on the loan, you usually need to have lived there for a while.  Sounds like you have that covered.  And your insurance policy needs to be for a rental.  I'm sure you've done that already.

As for "staying off their radar" they already have you squarely on their radar because your mailing address is not the same as the property.  That is a dead giveaway that you don't live there and are renting it out.

William Walker · Answer

Ok sorry, I misunderstood your original post.

You are fine with renting the property after living there for several years so no worry there.

You can use Zillow to find comps, but I would just present it as "123 red road sold on xx/xxxx for $100,000.  It is xx sq ft and has 3 bed 2 bath"  I don't think you need to show where you got the information.

You can also google "new hanover county property records" and you can go to the county website where you can search properties by address.  It will tell you the date the property was sold and for how much (as well as a ton of other info such as sq. ft. and who it was sold by and to).  Let me know if you need more info on this, it's a site I use a lot.

Justin Fox · Answer

They probably get that info from the public records from the county.  Go do some digging and see if the info is correct.  If your state is a 'full disclosure?' state, then the sale price is required to be recorded for public record.

Will King · Answer

Can I use the comps that i found on Zillow? I'm not connected to anyone with mls access so not sure how to get real comps on my own. Are the recently sold properties on Zillow accurate?

Justin Fox · Answer

When you file your appeal to the county for their assessment, use the actual comps as evidence.  You can usually find the comps the county used as well.

Your claims of any devaluation of the home may have a bigger impact on the result if it is a rental.  They tend to take more of a beating.  If you can show any tenant wear that would affect the value of the home (with pictures) that would be good too.

As long as you lived in the property a year or greater and then rented it (or whatever your lender says is acceptable), you should be fine.

Will King · Answer

Hi, William,

Maybe I was unclear in my original post.  The county has reassessed the value of my house. I was just using Zillow to get examples of recently sold comparable properties. I'm trying to find out if I should appeal the county's reassessment.

I lived in the house for several years before I rented it out. So I didn't immediately rent it out; but, at any rate, I'm not clear on tax laws and I'm trying to avoid unforeseen consequences of filling out the appeal form.

Thanks for your reply!

William Walker · Answer

I don't mean this sarcastically, what does it matter?  I've seen zillow be off by 75% of a properties real value and so I've never put much into the zillow "estimate". I don't believe that it has any impact on your taxes.

When you say appeal form do you mean an online form to zillow?  I'm hoping that you didn't buy the property as a primary residence and then immediately rent it out, but if you did then I wouldn't fill out the form. Not that I think it wil trigger a tax investigation but better to stay off the radar.

I personally would just leave it. Maybe your tenants will be happy to be paying their rent on such an expensive property!