Here, the Petitioner contends
that his property was over-valued in 2009 based on the property’s purchase
price and its appraised value. Randy Wolfe testimony. According to Mr.
Wolfe, he purchased the property under appeal on May 11, 2009, for $29,900. Id.;
Petitioner Exhibit 1. The sale of a property is often the best evidence of
the property’s market value-in-use. See Hubler Realty Co. v. Hendricks
County Assessor, 938 N.E.2d 311, 315 (Ind. Tax Ct. 2010) (finding that the
Board’s determination assigning greater weight to the property’s purchase price
than its appraised value was proper and supported by evidence). In this case,
however, the purchase took place on May 11, 2009, which is more than sixteen
months after the January 1, 2008, valuation date for the 2009 assessment year.
The Petitioner made no attempt to relate the property’s 2009 purchase price to
the January 1, 2008, valuation date. Thus, the Board gives little weight to the
Petitioner’s purchase price.
The Petitioner also presented
an appraisal prepared by Tom Kreutzer and John Oldfather that estimated the
value of the property to be $30,400 as of July 9, 2009. Randy Wolfe
testimony; Petitioner Exhibit 1. Mr. Kreutzer is an Indiana Certified
Residential Appraiser Trainee and Mr. Oldfather is an Indiana Certified
Residential Appraiser. Petitioner Exhibit 1. The appraisers certified
that they prepared the property’s appraisal in accordance with the Uniform
Standards of Professional Appraisal Practices (USPAP). Id.
Like the Petitioner’s purchase
of the property, the Petitioner’s appraisal on its face is too far removed from
the proper valuation date to be probative of the property’s market value-in-use
for 2009. However, pursuant to 50 IAC 21-3-3, local assessing officials are
instructed to use sales of properties occurring between January 1, 2007, and
December 31, 2008, in performing sales ratio studies for the March 1, 2009,
assessment date. Because the appraisers used four 2008 sales in their sales
comparable analysis and because the appraisers did not adjust any of the
comparable sales for the date of the sale or listing – suggesting that the
appraisers did not believe that property values changed sufficiently during
that time period to warrant an adjustment
– the Board finds that the Petitioner raised a prima facie case that his
property was over-assessed. See Meridian Towers, 805 N.E.2d at 479.
Once the
Petitioner raises a prima facie case that its property was over-valued, the
burden shifts to the assessing official to rebut the Petitioner’s evidence. See
American United Life Insurance Co. v. Maley, 803 N.E.2d 276 (Ind. Tax Ct.
2004). To rebut or impeach the Petitioner’s case, the Respondent has the same
burden to present probative evidence that the Petitioner faced to raise its
prima facie case. Fidelity Federal Savings & Loan v. Jennings County
Assessor, 836 N.E.2d 1075, 1082 (Ind. Tax Ct. 2005).
Here, the
Respondent’s witness argued that the Petitioner’s appraised value was flawed
because it was based on REO sales. Thomas testimony. However, the
Respondent’s own evidence shows that properties sold by a bank can be
arms-length transactions. See Respondent Exhibit D, pg 5. “Lender buys
and adds property to Real Estate Owned (REO)” and “Property held in the lender
portfolio may then be sold on the open market as an arms-length sale to a third
party.” Id. In fact, the IAAO paper offered by the Respondent simply
cautions that “as with any other sale, it is critical that foreclosure related
sales be properly verified to determine which, if any, can be used in modeling,
valuation or ratio studies. The special conditions of a foreclosure related
sale require that additional information be collected and reviewed in the
verification process before they can be used.” Id. at 15. Thus, the fact
that the appraiser used bank sales as comparable properties alone fails to
rebut the probative value of the Petitioner’s evidence.
In addition,
however, the Respondent showed that for each comparable property used by the
Petitioner’s appraisers in valuing the subject property, the comparable
property had previously sold, often at a much higher value.7 For example, while the appraisers used the December 24, 2008,
bank sale for $30,000, the property located at 430 South Elm sold on May 7,
2008, for $92,500. Similarly, the property located at 3242 Schilling Street
sold on March 6, 2008, for $72,900 and again on December 30, 2008, for $53,240,
but the REO sale on May 20, 2009, used by the appraisers, was only for $20,000.
Id. Likewise, the property located at 3237 Schilling Street sold on
January 2, 2008, for $111,605, but the REO sale used by the appraisers was for
only $43,050 on July 10, 2008. Id. Likewise, the property located at
3240 Schilling Street sold on March 6, 2008, for $72,500. Id. The
property sold again on December 30, 2008, for $57,200, but the REO sale on May
26, 2009, used by the appraisers was for only $24,000. Id. And the
property located at 3324 North Lincoln Street sold on January 22, 2008, for
$52,878 but the appraisers’ REO sale on November 3, 2008, was for only $32,900.
Id. Thus, for almost every sale or listing the appraisers used in
valuing the Petitioner’s property, the Respondent provided some evidence that
the sale or listing did not accurately reflect the property’s market
value-in-use as of the relevant valuation date. Therefore the Board finds that
the Respondent rebutted the Petitioner’s prima facie case.
Because the
Respondent’s sales were closer to the proper valuation date and because the
sales cited by the Respondent appeared to be unrelated to any foreclosure
process, and therefore more reliable indicators of the properties’ market
values, the Board finds that the weight of the evidence supports the
Respondent’s case.
