Thomas Russom writes on the ApartmentAssoc YahooGroups email list:
At our recent monthly meeting [of the Apartment Association of SE WI] Attorney Doug Pessefall presented an overview of the “Recent Trends in Wisconsin’s Property Tax Assessment Process”. Tim Ballering has retained Attorney Pessefall to challenge the City of Milwaukee assessments of sales of foreclosed properties. We all know that there a huge difference between the assessed value of a foreclosed property and its market value reflected in the actual sale. Tim Ballering has a compelling argument that if the property cannot be sold, for cash, at the assessed value, then THE ASSESSED VALUE IS WRONG.
A past member of my church showed up for visit this past Sunday. He is a head assessor in the City of Milwaukee in charge of educating other assessors. I asked him what was the reason for these huge differences in the assessed value of the foreclosed property and the actual market sale of the property.
He replied, ” THESE SALES ARE NOT NORMAL, they are motivated sales. Banks want to get these properties off their books so they are motivated short sell the properties. If the banks would have kept these properties on the market for a longer selling period of time the sale of the property would have met the burden of the assessment.”
This sounded to me like the liberal nonsense of “if we believe it then it is true” regardless of reality. I pursued the conversation further by telling him of a rural farm house I had to bulldoze. We did not initially follow up on a rehabber offer to purchase the house because a member of the family could not bear to have Grandma’s house turned into a rental. The house followed the enviable fate of abandoned property- animal entry, vandalized and KOed by a weather event., but that took two years to occur. I said to him” You know that that process occurs much faster in the City”. He replied, “Yes,I know. When they( foreclosed properties) are heavily vandalized they have no value.” When the City’s plan to sell foreclosed properties to only new first home owners and not to rehabbers does not work,they will beg for bulldozer dollars from the state (taxpayers on the hook) and blame the Governor for not caring about Milwaukee.
Let’s take your (or someone else’) non foreclosed, non vandalized house in the City of Milwaukee. Could you sell it for cash or conventional mortgage for the assessed value? Very unlikely and therefore your assessment is excessive.
Certainly the number of foreclosures has an impact. In fact Milwaukee’s former chief assessor, Peter Weissenfluh, had won an award from the International Association of Assessing Officers for an article he wrote on how foreclosures suppress the value of nearby non foreclosure properties
A former long term board member began a slow process of selling off his properties one at a time using a few different brokers. A smart, knowledgable, diligent guy. All of the properties were well maintained and occupied. He was in no hurry to sell. He was trying his best for top dollar. Of the sales I am aware of the details it appears he received 30-55% of assessed value.
Of the properties I bought in 2012, one third of these properties were not foreclosures and were exposed to the market on MLS for months. I did not know the seller, nor the listing broker. The average price I paid for these was 19.05% of assessed.
The two thirds were indeed foreclosures. None of the foreclosures we purchased seriously vandalized, most had vinyl siding and vinyl windows, with good roofs etc. In general they needed little more than had they been vacated by a three year tenant. Most were ready to rent within a couple weeks. We paid on average 24.95% of assessed value or more than we paid on average for the non foreclosures
The argument made by the city that the banks were in a hurry to sell has a hole in it as many of the foreclosed properties I bought had been listed on MLS for months.
The city also works hard to hide the truth in valuations. Of the properties we purchased in 2012 only one appears in their listing of sales data that is posted at:http://assessments.milwaukee.gov/mainsales.html
One would expect that a listing such as this would show all sales or have a disclosure that states that it only includes those sales that supports their assessments. But it does not.
In 2011 a total of 33 one and two family properties sold in the 12th District. The average sale price was nearly 35,795 less than assessed. Nearly a$1.2 million less for just 33 sales. Only two of those sold at or slightly above assessed. In 2010 it was 38 sales and an average of 26,943 less than assessed value.
The only areas that sales consistently were sold for assessed or more than assessed were the Eastside and one or two assessment neighborhoods in Bayview. This means the most affluent neighborhoods are being subsidized by owners of lower valued properties.
So again I will state, if you could not sell your property within 90 days for cash or conventional financing at assessed value you are being overcharged.