Property Tax Reassessment Scams

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It seems these days almost anything can be a scam.  We’ve had mortgage loan scammers, rental scammers, foreclosure savior con artists and loan mod sharks. The latest con ? Property tax reassessment.

Let’s say you paid $750,000 for your home and now it’s worth about $550,000, but you’re still paying property tax on the purchase price. Enter the scammer who poses as a legitimate government agent or agency and offers to file a tax assessment appeal on your behalf—for a fee. Thing is–you can easily do this yourself–for free. There is nothing illegal about charging for the service of filing an assessment appeal. But it must be made clear that the company offering the service is not a Government agency and that their services are not approved by any government agency. Even if proper disclosure is made, though, it is not clear why anyone would pay for such a service.
Here’s what you do. First, don’t pay hundreds of dollars to any company no matter how “official” it may appear. The tax assessor does not send out letters and the tax assessor does not charge when you file an appeal. So, ignore the scammer’s letter and go to directly to the county tax assessors website. Each county has a tax assessor’s website. There, download the appeal form.

This form will ask the usual information and then will also request two area comparable sales that make you think your property is now worth less. How do you find the comps? Probably the best way is to call your friendly neighborhood real estate agent and ask him or her to look up some comps for you. The good part here is the agent will be able to tell you if it’s going to be worthwhile filing right now. It may be better in some areas to wait for 6 months or so. If you don’t have a real estate agent nearby, give me a call at 626-641-0346 and I will be able to provide help anywhere in Southern California.

Once you fill out your form with your information and the relevant compus, upload it to the website and then–wait. In a few weeks the answer will come. If the tax assessors says no, don’t give up. File again in six months. Property values, after all, are still falling. Sometimes the poor tax assessor takes awhile to see the big picture.

Believe it or not, sometimes the the Los Angeles County Tax Assessor  and many others  actually reviews tax assessments on its own.. Last year, the Los Angeles County Assessor’s office “initiated a review of single-family residences and condos purchased between July 1, 2004 and June 30, 2007. About 318,000 homes were reviewed, resulting in substantial savings for 128,000 homeowners.” In 2009, the review will be expanded to some 500,000 single family homes and condos purchased between July, 2003 and June,.2008. The office notes, “There is no reason to pay for a review that will be done for free.”

“All 500,000 owners whose homes are reviewed will receive a letter by the end of June notifying them of the results. Owners who disagree with the results or were not included in the review, may file an application through December 31.” There is no charge for this.

In California, it can be a little tricky to determine whether your tax assessment is too high. People tend to forget that the assessment is based on a value determined at the first of the year; and then the bill can stretch into the following year. For example, Californians have until April, 2009 to pay the second half of their current property tax bill. That’s the second half of a fiscal year that started July 1, 2008. And the bill was based on an assessment of value as of January 1, 2008. So there is, today, more than a year’s lag between the assessed value and today’s market value. Sure, market values have decreased since last January, but that’s not relevant for the current bill.

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L.A. County: December 2008 Home Values

Seal prior to 2004 lawsuit threat
Image via Wikipedia

You guessed it–home values are still going down. December home sales for L.A. County show a median home value of $320,000, down from the $340,000 of november and 36% lower than November of 2007. Of course, neighboring counties are doing worse, some by a wide margin, but that is hardly cause for joy. There’s no doubt we’re all in this together.

As always, some areas are in worse shape than others. By now, we expect to see huge price drops in North L.A. County and we surely do: Lancaster shows medians of $115,000 and $116,000 [93534,93535], representing drops of 50% and 38% respectively over last year, while 93536 shows a median of $199,000, 35% less than last year. This is grim news as it most certainly means foreclosures and short sales for many. Those that remain must somehow deal with a loss of up to 50% of their home’s value over last year. Sadder still is the story in Palmdale where one ZIP[93591] has lost a spectacular 74% of its median home value in one year to arrive at a crushing $65,000.  Other Palmdale areas show losses of 46% to a median of $116,000 [93550]and 35% to a median of $225,000 [93551].

Other areas hard hit by the home value drop include many areas in Los Angeles City, including Hawthorne, Watts and Compton along with others. In our own area, Pomona continues to lead the way down with a 50% drop in 91768 to a median of $173,000, 41% in 91766 to a median of $223,000 and 38% in 91767 to $216,000. Other large drops occurred in Baldwin Park [42% to $235,000], South El Monte [41% to $270,000], Whittier 90602 [47% to $318,000], but, for the most part, the San Gabriel Valley‘s median home values are higher than the county median and have dropped less.

San Dimas, for instance, shows a 14% drop over last year to $465,000, though that is based on very few sales, itself a poor harbinger for the future. Arcadia dropped about 24% to a median of about $750,000 across its two ZIP codes. Monrovia is down 11% to $478,000, again well about the County median.  Covina has lost around 20% to a median in the high $300,000s.  Walnut has actually gained value to a median of $634,000. Guess you’re doing something right, Walnut. Glendora is down a bit over 20% in both 91740 and 91741 to medians of $343,000 and $419,000 respectively. La Verne is down 6% to $465,000 which represents very good value. Buy in LaVerne. Claremont is down a measly 2% to a median of $525,000.

Many of these medians are based on very few sales, so we can expect them to change, possibly radically, inthe near future. South Pasadena, for instance, now is up 11% to a median of $1,200,000, but that is  based on only 3 sales for the whole month. Condo sales have been abysmal, as expected, and many median values are based on 1 or 2 sales. The median condo price in L. A. County is $290, 000, down 25% over November 207. Sales, though, are way off.

It’s clear that the pace of decline is slowing and the median for L. A. County is dragged down by horrendous numbers in some parts of the City of L. A. as well as Palmdale, Lancaster and the high desert areas  like  Littlerock [down 51% to a median of $140,000]. Established suburbs, such as those in the San Gabriel Valley, with good schools, well-managed city governments and alreay-built and paid-for infrastructure are doing much better than outlying districts. It is also true, though, that if our Current Recession deepens cities will be less able to maintain these infrastructure amenities in the face of shrinking  tax base  from closing auto malls, lost retail outlets and rising unemployment.

Statistics provided by MDA DataQuick and are printed in the L.A. Times.

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