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c. There is no dispute about the fact that the Petitioner bought the subject property for $195,000 on August 19, 2011. There also is no dispute that the subject property was appraised for $230,000 as of September 13, 2011, and the fact that the appraiser is an Indiana Licensed Residential Appraiser who certified that she prepared the appraisal in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP).
d. In this case, the Petitioner’s
purchase and the appraisal were within six months of the assessment date. They
both are close enough in time to be probative evidence for this case. The
Petitioner made a prima facie case through either one. Consequently, the Board
must consider how effectively the Respondent rebutted or impeached the Petitioner’s
case.
e. The Respondent started by
attempting to prove the assessments totaling $365,200 are correct because these
properties were listed with one realtor for a combined asking price of $399,800
for more than a year and subsequently they were listed with another realtor for
an additional period with a combined asking price of $389,900. But they did not
sell during either of these listings. These unsuccessful listings probably indicate
an accurate valuation would be something less than $389,900. But that fact is
irrelevant. It does nothing to establish that $365,200 actually is an accurate valuation.
Ultimately, the Respondent offered no substantial evidence that the existing
assessed values correspond to the actual market value-in-use of the subject property.
Instead, the Respondent primarily focused on attacking the credibility of the
Petitioner’s purchase price and the appraisal.
f. The Respondent claimed the
appraisal is flawed and should be given little or no weight because it contains
misleading statements and errors. The main attack on the appraisal related to
the land value adjustments for the comparables. According to Mr. Simoni, the
appraiser stated that typical lake frontage is between 50 feet and 100 feet, with
excess front footage valued at $500-$1,000 per front foot. According to Mr. Simoni,
the appraiser’s adjustments for the comparables were not enough. (The appraiser
explained her adjustments in the Supplemental Addendum. She used $500 per front
foot. She adjusted less per front foot because the subject had excess frontage
and she deemed a minimal adjustment of $500 necessary.) Mr. Simoni purported to
recalculate the appraiser’s land adjustments on the comparables using $1,500 a
front foot. He substituted his opinion of land value to arrive at a higher range
of values based on the same comparables. Nothing in the record indicates that his
attempt to redo part of another appraiser’s work to correct it (thereby
reaching a higher range of values) is consistent with USPAP or generally
accepted appraisal principles. Although he is an appraiser, Mr. Simoni clearly
stated that he did not do an appraisal of the subject property and he was not
attempting to provide an opinion of its value. It is clear that Mr. Simoni did
not testify as an unbiased appraiser in this case. Accordingly, his attempt to
redo calculations in another appraiser’s work and use those to support a higher
conclusion of value regarding the subject property has little or no probative
value.
g. Similarly, the Respondent
attempted to attack the appraisal because it was prepared for refinancing
purposes. Conclusory evidence and argument was offered on this point, however,
it provided very little, if any, reason to conclude the appraiser’s opinion of value
was wrong.
h. But Mr. Simoni criticized other
aspects of the appraisal as well. For example, he noted a substantial mistake
in the lake frontage of comparable #8 and a small mistake the lake frontage of
the subject property. In final analysis, these errors diminish the credibility
and weight of the appraisal because they indicate the appraiser was not as careful
as she should have been.
i. Even though the Petitioner
paid $195,000 for the subject property, the Respondent argued that price is not
a reliable indication of market value-in-use. The Respondent claimed the
transaction did not meet the definition of market value because the definition
requires allowing a reasonable time for exposure on the open market. The Respondent
claims this requirement was lacking, but the Board disagrees. Before the Petitioner
bought the subject property, these parcels were exposed on the market for a long
time by two different realtors with an asking price of almost $400,000. The Respondent’s
claim that there would have been more potential buyers if the asking price had
been lower. And perhaps a significantly lower asking price would have been
better by encouraging more offers. But the Board will not base a final determination
on that kind of speculation. The lengthy marketing time for the subject property
with a series of realtors cannot be disregarded simply because the final selling
price was only about half of the asking price. (Of course, differences between asking
price and an offer to purchase are common. Negotiating and resolving those differences
to reach a final selling price is also common practice.) Nothing in the record
indicates the sale was made under duress or that it was not an arm’s-length transaction.
Therefore, this point is not a substantial reason to disregard the Petitioner’s
purchase price.
j. The Respondent also argued the
Petitioner’s purchase price was not valid for trending purposes because it was
an outlier. In other words, the Respondent claims that the Petitioner somehow
bought the subject property for substantially less than other people have paid
for comparable properties. But the Respondent failed to support this conclusory
testimony with substantial, probative evidence.
k. The Respondent offered several
purportedly comparable sales. In order to effectively use the sales comparison
approach, however, the proponent must establish comparability. Conclusory
statements that a property is “similar” or “comparable” are not enough. Long,
821 N.E.2d at 470. The proponent must identify the characteristics of the
subject property and explain how those characteristics compare to the
characteristics of the purportedly comparable properties. Id. at 471.
Similarly, the proponent must explain how any differences between the
properties affect their relative market values-in-use. Id.
l. The Respondent presented no
substantial evidence to show that the other properties actually are
comparables. The record contains no meaningful analysis of size, location, age,
condition, or other specific factors that must be considered to draw any kind
of meaningful conclusion from a comparison. Because the Respondent failed to identify
or value the differences between the properties, the other sales have no probative
value. Fidelity Federal Savings & Loan v. Jennings Co. Assessor, 836
N.E.2d 1075, 1082 (Ind. Tax Ct. 2005) (“the Court has frequently reminded
taxpayers that statements that another property ‘is similar’ or ‘is comparable’
are nothing more than conclusions and conclusory statements do not constitute
probative evidence. Rather, when challenging an assessment on the basis that
the comparable property has been treated differently, the taxpayer must provide
specific reasons as to why it believes the property is comparable. These
standards are no less applicable to assessing officials.” (citations
omitted and emphasis added)).
http://www.in.gov/ibtr/files/Binkley_75-008-11-1-5-09800_etc.pdf
