Here, the Petitioner contends that the subject property was over-valued in 2011 based on the property’s purchase price. Jackson testimony. According to Mr. Jackson, he purchased the property under appeal for $103,000. Id.; Petitioner Exhibit 1. The sale occurred on February 3, 2011, which is sufficiently close to the March 1, 2011, assessment date to be probative of the property’s market value-in-use for the 2011 assessment year.
The purchase price of a property is often the best indication of the property’s value. See Hubler Realty, Inc. v. Hendricks County Assessor, 938 N.E.2d 311, 314 (Ind. Tax Ct. 2010) (the Tax Court upheld the Board’s determination that the weight of the evidence supported the property’s purchase price over its appraised value). The Assessor, however, argued that Mr. Jackson’s purchase of the property was a “short sale” and therefore should not be used to value the subject property.
Market value is defined as the most probable price that a property would bring in a competitive and open market where the buyer and seller are acting prudently, knowledgably, and without undue stimulus. MANUAL at 10. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
• The buyer and seller are typically motivated;
• Both parties are well informed or advised and act in what they consider their best interests;
• A reasonable time is allowed for exposure in the open market;
• Payment is made in terms of cash or in terms of financial arrangements comparable thereto;
• The price is unaffected by special financing or concessions.
Id.
Despite the fact that the listing sheet identifies this property as a “possible short sale,” the property was sold by an individual – not a bank – and there was no evidence that the seller and Mr. Jackson were in any way related. Respondent Exhibit 4. Further, the evidence showed that the seller was represented by a realtor and the property was listed on the Multiple Listing Service – which is typically the way residential properties are sold. Id. Therefore the Board can infer that the property was widely advertised. Moreover, the listing sheet shows that the property remained on the market for 193 days – which suggests that the property had sufficient exposure to the market.
In addition, Mr. Jackson testified that the property was appraised twice prior to its sale. Jackson testimony. Mr. Jackson testified that the first appraisal, valuing the property at $112,000, was done prior to the property being listed for sale and the second appraisal, valuing the property at $108,000, was done two weeks prior to his closing on the property. Id. However, Mr. Jackson testified that he could not obtain copies of the documents. Id. Mr. Jackson’s testimony regarding the property’s appraised values alone would not have been sufficient to establish the value of the property. But Mr. Jackson was testifying to matters in which he had personal knowledge. Thus, while the Board gives little weight to the appraised values of the property, they do tend to support Mr. Jackson’s purchase price.
The Board therefore finds that the evidence Mr. Jackson purchased the subject property for $103,000, supported by his testimony regarding the property’s appraised values, was sufficient evidence to raise a prima facie case that his property was overvalued for the March 1, 2011, assessment date.
Once the Petitioner raises a prima facie case that his 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 his prima facie case. Fidelity Federal Savings & Loan v. Jennings County Assessor, 836 N.E.2d 1075, 1082 (Ind. Tax Ct. 2005).
Here, the Respondent argues that the subject property sold on August 17, 2007, for $203,000. Garoffolo testimony; Respondent Exhibit 4. Thus, Ms. Garoffolo argues, the property was not over-valued at $176,000. However, that sale took place more three and half years before the March 1, 2011, assessment date. Without evidence relating the property’s 2007 sale price to the value of the subject property in 2011, the Respondent’s evidence of the property’s 2007 sale has little probative weight. See Long v. Wayne Township Assessor, 821 N.E.2d 466, 471 (Ind. Tax Ct. 2005) (a party must explain how its evidence relates to the subject property’s market value-in-use of the relevant valuation date).
The Respondent also argues that the Petitioner’s property was valued correctly in 2011 based on the average sale price of similar properties located in the subject property’s area. Garoffolo testimony. In making this argument, the Respondent essentially relies on a sales comparison approach to establish the market value-in-use of the property. See MANUAL at 3 (stating that the sales comparison approach “estimates the total value of the property directly by comparing it to similar, or comparable, properties that have sold in the market.”) In order to effectively use the sales comparison approach as evidence in a property assessment appeal, however, the proponent must establish the comparability of the properties being examined. Conclusory statements that a property is “similar” or “comparable” to another property do not constitute probative evidence of the comparability of the two properties. Long, 821 N.E.2d at 470. Instead, 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.
But the Respondent presented no evidence to show that the properties she offered were comparable to the property under appeal. In fact, the Respondent’s evidence showed that the sale prices of properties in the area ranged from $68 per square foot to $110 per square foot in 2009 and 2010. Thus, the Board can infer that the homes in the Petitioner’s area varied a great deal. Because the Respondent made no attempt to identify or value the differences between the properties, the Respondent’s sales comparable market analysis has little probative value. As the Indiana Tax Court stated in Fidelity Federal Savings & Loan v. Jennings County 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.” 836 N.E.2d at 1082 (citations omitted and emphasis added). Thus, the Respondent’s evidence fails to rebut or impeach the Petitioner’s prima facie case.
