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Old 12-02-2010, 04:47 AM   #1
twoplustwo
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Default entire Laconia Board of Assessors quits over Vision Appraisal's valuations

Is there a town that has paid Vision for a re-val that has been happy about it??


From today's Citizen:

http://www.citizen.com/apps/pbcs.dll...685/-1/CITIZEN

The three members of the Laconia Board of Assessors have resigned en masse, citing their displeasure with Vision Appraisal's recent re-evaluation of the city's 10,000-plus taxable parcels.

In a tersely worded letter to City Manager Eileen Cabanel, the board Chaired by Robert Scharn state, "We as a board are unhappy and do not agree with the values that Vision Appraisal submitted to the city. They met with us to answer questions that we as a board had, and to no avail, got no answers. We feel that by signing the tax warrant, it goes against our commitment to the community to be fair and honest. For these reasons, we are resigning."

Scharn did not return a telephone message seeking comment, and board member James Saltmarsh's phone number is unlisted. But fellow board member Sheryl Foss, a professional real estate appraiser with 24 years of experience said, "From day one when we saw those (preliminary) values we didn't agree with them."

She believes many of the properties in her own neighborhood have been undervalued stressing that homeowners aren't likely to complain.

Foss said the assessing board met with Vision Appraisal and expressed their concerns, but said, company representatives never came back for a follow-up meeting. Instead, Foss said, City Assessor John Duhamel gave her a list of sold properties in her neighborhood that were used by Vision to set the values of other nearby properties.

"Was I happy with the list, not by a long shot," Foss said. She believes some city properties are assessed too low and that others are too high.

In the wake of the resignations, an emergency meeting of the three alternates on the Board of Assessors was called Wednesday night. The three alternate board members, Mike Randall, Debbie Cotton and Tom Daigneault were unaware of the resignations when they arrived at the meeting.

Cabanel apologized to the three alternates and then explained that said had talked with all three members of the Board of Assessors after receiving a copy of their resignation letter that was hand-delivered to City Hall on Monday. She told the Wednesday evening's meeting that two of the assessors are upset because they believe Vision's values are too low. The third member, according to Cabanel, had no opinion on the values, but resigned out of a sense of solidarity with the other members.

The city manager said one board member expressed concern that their neighborhood was assessed too low and as a result suspected the rest of the city would follow suit. A second board member felt commercial and waterfront property values had been set too low. Cabanel stressed that none of the assessors were able to give her concrete examples of properties they thought were under-assessed.

"This is an important thing we did," Cabanel said of the $350,000 full reassessment that was completed by Vision Appraisal. It marks the first time a complete re-evaluation was done in the city in 20 years. Typically, yearly updates have been completed by the city assessor and staff. Despite the resignations, Cabanel said city tax bills had already been mailed with most arriving on Wednesday.

The manager explained that she had invited representatives of Vision Appraisal and the New Hampshire Department of Revenue Administration to attend the session and help explain the processes they use.

Vision project manager Paul McKenney explained the methodology they used in mass appraisal differs from fee appraisal which sets value on an individual property versus a group of properties in a particular area.

He said they analyzed data from 528 property sales over a two-year period and ultimately used one year of sales data to set their model using statistical methods.

Because there were only five sales logged of vacant land, McKenney explained Vision used a method where structural improvements were backed out resulting in a land value being determined.

"We check (our numbers) in many different ways. We want them all to sync," he said.

He said Laconia now has a 95 percent assessment to sales ratio meaning that a property would sell for 95 percent of its assessed value. He also said the city's coefficient of dispersion (COD) is 15 percent which shows how close their data set is to the median. He said the re-evaluation showed that residential values in the city had declined nine percent compared to the prior year, mobile homes went down 19 percent, condominium values declined by 10 percent, waterfront down 4 percent and commercial properties down three percent. Overall assessed valuation of the city fell by $193 million compared to 2009.

Stephan Hamilton an auditor with the DRA's appraisal division told the gathering mass appraisal is not an easy thing to do, especially when there is not a lot of sales data available.

He said there will always be dispersion explaining the process essentially develops a mathematical formula that predicts the value of property.

Last year, Hamilton said multifamily properties were "vastly overvalued" in Laconia, noting the Vision's latest work corrects the problem and levels the playing field for taxpayers.

"There is nothing to indicate that the standard methodology wasn't used," Hamilton said, but stopped short of guaranteeing the accuracy of the re-evaluation.

"There is nothing that indicates to me there should be any concern," he said, explaining that while the state has overseen Vision's work in Laconia, the state had not yet finished its final analysis.

"I'm looking to receive some assurance that there is some level of comfort that the assessments we have are proportional," Randall said.

"I would say they are. I am comfortable with what I've seen so far, and I've been doing this for 20 years," responded Chuck Reese who has been supervising Vision's work for the state.

"The re-evaluation will ultimately give the (assessing) board a better leg to stand on," he said.

Following the presentation, Randall asked Cabanel what the consequences would be if the assessing board declined to sign the tax warrant.

"We will not be able to collect taxes," Cabanel responded.

Earlier, board member Debbie Cotton said she believed that there were still some "disparities in values" in some of the city's assessments especially among similar homes. She said her signature on the warrant should not be construed as an endorsement of the re-evaluation.

Randall made similar comments saying his signature was "neither praising nor condoning" the appraisals but rather an indication "that the consequences were too great not to sign."

Randall made the motion to sign the warrant and Daigneault seconded. The board ultimately voted unanimously to sign it.
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Old 12-02-2010, 06:47 AM   #2
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Default Project Manager..........

The Vision Project Manager in Laconia is the same person who managed the recent Moultonborough process and who provided little response to citizen concerns there as well. Seems like a similar result happened in Laconia.
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Old 12-02-2010, 07:06 AM   #3
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Default too low?

seems like they quit because the values were too low?
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Old 12-02-2010, 07:20 AM   #4
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No doubt they were not happy with the evaluation falling 193 million.I bet if it was the other way around they would not have made this protest.
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Old 12-02-2010, 07:59 AM   #5
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Read back through the article:
There's three board members and three alternate board members.
Two board members felt the values were too low.
One board member felt the values were acceptable but quit to essentially "send a message".

Problem #1: If property is assessed too low and the city has budgeted for x-amount of dollars, then the tax rate needs to be raised to compensate; however, because the tax rate was already set before the bills went out to property owners, the city could now be under-funded.

Problem #2: If they members of the board do not sign the tax warrant, the city has no legal means for collecting taxes at all. Being under-funded wouldn't be a problem - the city would have NO funds at all.

Problem #3: Where's the transparency of these three board members who resigned? They turned in a letter to the City Manager, but obviously had made a decision before the meeting! That decision should have been made in a public meeting. Perhaps there's a piece of the story missing here? I don't know... but it doesn't sound right to me.

Problem #4: None of the three board members could give Visions an example of one of the 528 properties that were used in the statistics modeling for the reassessment that they felt were under valued. Not one. Assessments can be done a number of ways - for a city like Laconia, assessments are done based on the value (selling price) if properties. Small towns may do it by a more hands-on approach; by going to each house, each property, etc., and walking the property, talking to the owner about improvements (or depreciations) etc.

Problem #5: The article doesn't go into what exactly the board members and Visions talked about that night. The board members claim they did not get answers from Visions; Visions is disputing that. I don't doubt that the board members aren't highly qualified or professionals, but it sounds like they got answers from Visions; just not the answer they liked...

Finally - Problem #6: There's a problem with the tax process (timing) if a board can't get the answers they want or need on an assessment or reassessment and yet tax bills have to go out. Period. I can't imagine being one of the alternates on that board who HAD to sign the tax warrant. It's too bad, really, that the board members' backs were put up against the wall in this way.
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Old 12-02-2010, 10:40 AM   #6
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Old 12-02-2010, 11:10 AM   #7
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Well one or two things will happen now:

they town will either learn to curtail their expenses (that will show them for releasing the tax rate before the assesments
or
They will just nail us next year with a gigantic tax rate increase next year to keep their spending

LOL - which one will they choose?
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Old 12-02-2010, 12:57 PM   #8
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Originally Posted by AC2717 View Post
Well one or two things will happen now:

they town will either learn to curtail their expenses (that will show them for releasing the tax rate before the assesments
or
They will just nail us next year with a gigantic tax rate increase next year to keep their spending

LOL - which one will they choose?
Yup, just raise the taxes so we can continue to spend they way we want. I wish the "real" world worked like that.
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Old 12-02-2010, 12:59 PM   #9
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Yup, just raise the taxes so we can continue to spend they way we want. I wish the "real" world worked like that.
i know, So do I, just stinks knowing that that is probably going to be their move, and then use this as an excuse next year as well
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Old 12-02-2010, 01:19 PM   #10
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Within a recent LaDaSun newspaper article it said that Laconia was considering charging ten dollars to use their public tennis court(s) which was a big surprise to me as I did not think that Laconia had any public tennis court(s).

Have to wonder how much revenue that will bring in for Laconia?
................


Laconia 2009 assessed value : $2,114,274,299

Laconia 2010 assessed value : $1,921,998,436

This is a decrease of ............. :$192,275,866 which is negative 9.6%
.................

Increasing the 2009 rate from 18.04 to the new 2010 rate of 19.78 is an increase of 1.74 or 9.1%.

................

This may sound a wee bit strange to anyone unfamiliar with Laconia, but you know that lately as I drove down some of the residential streets like Elm St, I could have sworn that I was seeing those local neighborhood assessed values falling down just like all the leaves from the maples and birches. Prices were faaaaaaalllllllllliiiiiinnnnnngggggggg!!!
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Old 12-02-2010, 01:33 PM   #11
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I personally was pleased with my assessment for Laconia and found it to be very accurate with current market conditions. We just bought a condo this year and the 2009 assessment was $40,000 higher than our purchase price.

This was a regular sale (not a short sale or foreclosure) so I am happy that the property was reassessed to reflect real conditions. We paid $72,000 for a furnished unit so I thought our new assessment of $68,600 was right on par.

Of course for people who bought at the height of the market these values may not be good news!
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Old 12-03-2010, 08:55 AM   #12
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Default Not happy with assessment

Last year my property was assessed for $235,000. This year it was assessed for $184,500. A drop of $50,500! I called Vision and they never return my call. I called twice and no response.

I called an independent appraisal campany and they believe Vision use the latest selling price to determine the evaluation. The unit next to me was sold for $184,500. Only because the owner committed suicide and the probate court issue a 'short sale'. Last summer, a similar unit was sold for $210,000.

I was also told this is the 'sign of the times'. Foreclosures, short sales and estate sales will bring evaluation down. Right now apprasal companies are swamped with bank appraisals and it looks like it will settle in a couple of more years. At most 5 years as ARM mortgages wiil mature after the maximum 7 years.

The long story short. Don't expect a 'return on your investment for another 5 years.
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Old 12-03-2010, 09:08 AM   #13
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"Cabanel stressed that none of the assessors were able to give her concrete examples of properties they thought were under-assessed."

Seems a bit odd to resign but be unable to give any examples of why you are resigning. Maybe someone is trying to refinance and needs their appraisal to be higher
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Old 12-03-2010, 11:03 AM   #14
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Originally Posted by BroadHopper View Post
Last year my property was assessed for $235,000. This year it was assessed for $184,500. A drop of $50,500! I called Vision and they never return my call. I called twice and no response.

I called an independent appraisal campany and they believe Vision use the latest selling price to determine the evaluation. The unit next to me was sold for $184,500. Only because the owner committed suicide and the probate court issue a 'short sale'. Last summer, a similar unit was sold for $210,000.

I was also told this is the 'sign of the times'. Foreclosures, short sales and estate sales will bring evaluation down. Right now apprasal companies are swamped with bank appraisals and it looks like it will settle in a couple of more years. At most 5 years as ARM mortgages wiil mature after the maximum 7 years.

The long story short. Don't expect a 'return on your investment for another 5 years.
Maybe I'm missing something, but why would you want your appraisal from the town to go up? You'd be paying $19.78 for each thousand it goes up.
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Old 12-03-2010, 11:35 AM   #15
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Default RE value

The tax assessment also determine the market value of your property. Buyers will look at the tax evaluation as a criteria in determing the 'fair market value' of the investment.

Your taxes don't really go down. The tax rate goes up so it's a wash.
It's your return on investment that suffers.
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Old 12-03-2010, 12:02 PM   #16
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The tax assessment also determine the market value of your property. Buyers will look at the tax evaluation as a criteria in determing the 'fair market value' of the investment.

Your taxes don't really go down. The tax rate goes up so it's a wash.
It's your return on investment that suffers.

If a buyer uses your tax value to determine what they will offer on a property they are not understanding property value. It is never true that a tax apprasial value determines a properties worth. Recent sales data and what a buyer is willing to pay and a seller is willing to accept determine what a property is worth nothing else.
Ask anyone in real estate or a bank appraiser.
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Old 12-03-2010, 12:28 PM   #17
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Ask anyone in real estate or a bank appraiser.
Right, but so often I see "priced below assessment value!" in RE ads
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Old 12-03-2010, 12:48 PM   #18
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Right, but so often I see "priced below assessment value!" in RE ads
Then there should be clarification of 'tax assessment' or 'market value assessment' -

JustSold hit the nail on the head: "Recent sales data and what a buyer is willing to pay and a seller is willing to accept determine what a property is worth nothing else."
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Old 12-03-2010, 01:02 PM   #19
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Then there should be clarification of 'tax assessment' or 'market value assessment' -

JustSold hit the nail on the head: "Recent sales data and what a buyer is willing to pay and a seller is willing to accept determine what a property is worth nothing else."
Conversely, shouldn't tax assessment value reflect current market value? This is really a shell game!
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Old 12-03-2010, 01:24 PM   #20
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Default Tax vs market assessment

Before the state took over determing tax assessment in the late 90,s because of the education mess. Towns determined tax evaluation based on the use of municipal services. Summer residents get a break in taxes as they don't use the municipal services during the winter months such as the public schools. Agricultural use were taking into condideration as well. There may be only one family that owns several hundred acres. This makes sense.

Today, tax assessment is more like the market value assessment, without regards to seasonal or agricultural use. So those who have views and land are paying the taxes, not the folks who actually benefit from municipal services. This is where it is wrong!

That is one of the reason why the state should seriously consider current taxation policies thrown out and replace it with something like the VAT (added value tax) practiced in over 150 countries in the world.
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Old 12-03-2010, 01:43 PM   #21
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I dont know why you people are upset that your tax assesment went down. You knew that if your tax assesment went down, they were just going to hike the tax rate to make up for it...which they did, and it washes.

If you have a buyer looking at your property and they go off the tax assesment as a guide to a purchase price they dont know what they are doing. I have been in real estate / mortgage business for a long time, and rarely do people run off the tax assesment.

My home in Laconia was just assesed at 204k down from 229k. I just turned down an offer of 302k. You need to understand more about the trends of the market.
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Old 12-03-2010, 01:51 PM   #22
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I dont know why you people are upset that your tax assesment went down. You knew that if your tax assesment went down, they were just going to hike the tax rate to make up for it...which they did, and it washes.

If you have a buyer looking at your property and they go off the tax assesment as a guide to a purchase price they dont know what they are doing. I have been in real estate / mortgage business for a long time, and rarely do people run off the tax assesment.

My home in Laconia was just assesed at 204k down from 229k. I just turned down an offer of 302k. You need to understand more about the trends of the market.
Is this how it was suppose to work originally? I thought if the value of your home went down, so did your taxes. Not that the town would raise the tax rate to make up the difference. Value of home = amount of taxes you pay.
Like Seaplane Pilot said, it's a shell game that they are playing. Since I am self-employes and business has been off for the last few years, so my income has gone down. I wish I could lower my mortgage payment accordingly to make up for the difference.
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Old 12-03-2010, 02:14 PM   #23
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I dont know why you people are upset that your tax assesment went down. You knew that if your tax assesment went down, they were just going to hike the tax rate to make up for it...which they did, and it washes.

If you have a buyer looking at your property and they go off the tax assesment as a guide to a purchase price they dont know what they are doing. I have been in real estate / mortgage business for a long time, and rarely do people run off the tax assesment.

My home in Laconia was just assesed at 204k down from 229k. I just turned down an offer of 302k. You need to understand more about the trends of the market.
Maybe I should hire you as a broker. I had a chance to purchase a short sale and save myself $600 a month. However, the banks no longer deal bridge loans. Original price on my property set by the first broker was 235. Then he drop it to 210. When the other property fell through a deal, I had another broker try to sell my property at 175. When the unit next door sold for 148.5 my broker called and told me that because of that, I will have to bring the price down to 148.5 or wait a few months. The other property is still available as the mortgage company will not lower the price. I just found out that there will be a lien for back taxes on the other property as the mortgage company is not paying the taxes.

I tried to convince the banks that I will rent out my property and live in the other until the first property is sold. Both properties are prime rentals. Doesn't work that way. The local bank actually pointed at the LADASUN rental page and says 'Good Luck'. I will never go back there again.
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Old 12-03-2010, 02:34 PM   #24
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Default undies in a bunch

Just a few weeks ago people were complaining about being in donor towns. Now all of the assessed valuations come in low and people still complain? If I were a donor town, I'd want valuations to be absolute rock bottom.

As long as everybody in the town is equally undervalued, it doesn't materially affect your tax payment and there's no relationship between assessed value and actual value.
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Old 12-03-2010, 02:36 PM   #25
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I always understood that Fair Market Value is the agreed upon price between a willing and informed buyer and a willing and informed seller under usual and ordinary circumstances. It is the highest price estimated in terms of money which the property will bring if exposed for sale on the open market with reasonable time allowed to find a purchaser who is buying with full knowledge of all the uses and purposes to which the property is best adapted and for which it can be legally used.

The sellers realtor's job is to do market analysis and price the property accordingly. If the sellers realtor did their job correctly then the asking price should be a correct assessment of value.
Often, the asking price for the home is based upon comparable sales in the area - similar homes that have sold recently. Using the selling prices for those homes, they can determine what the home should sell for, and price the home accordingly.
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Old 12-03-2010, 02:50 PM   #26
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A towns budget is X and for sake of argument say it is $1,000,000. The value of the towns taxable property is 10,000,000.... so the towns taxable value changes with the next re-valuation and goes down to $8,000,000.... you do the math... but if the budget does not change the tax rate would go up to get the same $$ for the towns budget based on the new tax value of the town. That is how it is done.

The State requires a town to revalue (every 5 years I believe) so they keep the towns value close to what is going on the the real estate market but it is only a snap shot in time and not a tracking of events. The State looks at the town taxable property value and then assigns a reference called the equilization rate to show how far off from current market value the towns taxable value is. It is a reference number only and used for comparing towns in the state and has no real value.

Its Friday I do not want to do the math

Can't you tell I am in the middle of re-certification classes right now for my RE license renewal.
OK Class is over.
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Old 12-03-2010, 05:12 PM   #27
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Conversely, shouldn't tax assessment value reflect current market value? This is really a shell game!
Depends on the town.

Some towns have 100% assessment as tax value, others have less - for example Alton uses 95% but has used 100% in the past.
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Old 12-03-2010, 05:15 PM   #28
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Originally Posted by Just Sold View Post
A towns budget is X and for sake of argument say it is $1,000,000. The value of the towns taxable property is 10,000,000.... so the towns taxable value changes with the next re-valuation and goes down to $8,000,000.... you do the math... but if the budget does not change the tax rate would go up to get the same $$ for the towns budget based on the new tax value of the town. That is how it is done.

The State requires a town to revalue (every 5 years I believe) so they keep the towns value close to what is going on the the real estate market but it is only a snap shot in time and not a tracking of events. The State looks at the town taxable property value and then assigns a reference called the equilization rate to show how far off from current market value the towns taxable value is. It is a reference number only and used for comparing towns in the state and has no real value.

Its Friday I do not want to do the math

Can't you tell I am in the middle of re-certification classes right now for my RE license renewal.
OK Class is over.
Not sharpshooting you here, but there's more to the final tax rate than the town's rate. A tax rate is set by the county, state, town, and school rate. Each municipality has a budget and funds have to be raised in advance for a town, county, state, and school to operate. In other words, a tax rate change may be a result of increases/decreases from any of these budgets that are included in setting a tax rate.
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Old 12-03-2010, 08:48 PM   #29
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Depends on the town.

Some towns have 100% assessment as tax value, others have less - for example Alton uses 95% but has used 100% in the past.
I thought the state was now requiring 100%
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Old 12-03-2010, 10:23 PM   #30
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I thought the state was now requiring 100%
I don't think so... What you're talking about is equalization and it's the ideal, but I don't think it's the law - I could be wrong... (Perhaps someone in the know here will chime in on this one...)

The Local Government Center has a great explanation on this - probably more than you want to know - but here it is:

http://www.localgovernmentcenter.net...CArticleID=204
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Old 12-03-2010, 11:21 PM   #31
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With the current credit market there is now a third party in most agreements of the sales price. The bank is not very eager to take any risk at our paying too much for the property they are really committing to. Don't underestimate the pressure this puts on the market prices.
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Old 12-04-2010, 01:01 AM   #32
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Originally Posted by BroadHopper View Post
The tax assessment also determine the market value of your property. Buyers will look at the tax evaluation as a criteria in determing the 'fair market value' of the investment.

Your taxes don't really go down. The tax rate goes up so it's a wash.
It's your return on investment that suffers.
Buyers tend to look at other sales when making offers so basing assessments on recent sales makes sense to me. Unfortunately short sales, foreclosures, etc. drive down sales because many sellers have to lower their prices to compete.

I recently sold my house and had to price similar to short sales and foreclosures. The agent noted which comps were short sales and foreclosures, but that does not help much when it comes to attracting a buyer. If two very similar units are on the market and one costs $100,000 and one costs $150,000...which one would you buy? Similarly, if you are considering making an offer and see a nearby property sold for far less than the asking price you are considering, how much would you be willing to pay?

I was impressed that Laconia reassessed our unit to very close to what we bought it for. They came out and viewed the property and also asked several questions about the nature of the sale to confirm it was not a short sale, foreclosure, or friendly deal.
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Old 12-04-2010, 06:58 AM   #33
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I thought the state was now requiring 100%
The Alton assessor makes adjustments every year based on sales for the prior 12 to 18 months. One objective is to keep the equalization ratio at or near 100%. That is always a moving target so as RE market values move up or down, the equalization ratio will always lag somewhat. The equalization ratio is computed by the state DRA based on sales over the past year.

The objective, however, is to have assessments at market value.

If all assessments are the same % above or below market value, the equalization value would move away from 100% but individual tax bills would be the same as if at 100%.

If individual classes of property are out of whack relative to each other, some too high and others too low, then the state computed Coefficient of Dispersion (COD) will be greater than zero. This COD factor is a measure of inequity and if too high can trigger a revaluation.

Towns that do annual adjustments like Alton usually manage to keep the equalization rate close to 100% and the COD low. Alton has a full time assessor and does not contract out the assessment work. Vision is used only for their data base software and web hosting. Towns that wait a full 5 years or so and then contract the work out can expect considerable chaos.
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