Property Revaluation

1

• Property Revaluation
• Essex, Vermont
• Tyler Technologies CLT Division

2
Agenda

• Introduction
• Overview
• Why Revaluation?
• The Revaluation Process
• Standards for Quality
• What Can We Expect From This Revaluation?
• Q A

3
Why Do a Revaluation?

• Equity - The market is forever changing. Every
  property is not affected equally. Fair market
  value is affected by a number of factors
  including property class (residential,
  commercial, industrial), property location,
  individual property desirability and market
  supply and demand.

4
Why Do a Revaluation?

• Its the Law (Title 32 Sec 4041b.)
• If the director of the division of property
  valuation and review determines that a
  municipalitys education grand list is at a
  common level of appraisal below 80 percent or has
  a coefficient of dispersion greater than 20, the
  municipality shall reappraise its education grand
  list properties.
• The last full revaluation of Essex was performed
  in 1990.

5
The Revaluation Process

• Data Collection
• Review sales and neighborhoods
• Build and test valuation models
• Refine model values
• Value all properties using models
• Review all values
• Inform public and disclose values
• Conduct informal taxpayer reviews

6
Sales Neighborhood Review

• Valuation neighborhoods are reviewed and refined.
• Property sales recorded between April 1, 2005 and
  April 1, 2007 are being carefully reviewed to
  ensure accurate data in the assessors database.

7
The three approaches to Value

• The cost approach estimates market value by
  adding the depreciated value of the improvements
  to the contributory value of the land. This is
  the approach most widely used for assessment
  purposes.
• The income approach estimates market value by
  capitalizing net income.
• The market approach uses comparable sales to
  estimate value.

8
The Models(A set of formulas used to
calculate a value)

• ConsiderationsCost, Income and Market.
• Used to compute fair market value on many
  different types of properties.
• Tested against the sales to support the quality
  of the models.

9
Land Analysis

• One of the most important phases of any
  revaluation is the setting of land values.
• Location, location, location!
• We review and analyze any vacant land sales in
  the Town to develop land valuation models that
  reflect the local market.

10
Building Cost Analysis

• To determine local construction costs (including
  builder profit) we analyze sales of new
  construction.
• To determine depreciation models (based on age
  and observed physical condition) we analyze
  sales of older dwellings.

11
Commercial Industrial Models

• The income approach estimates market value by
  capitalizing net income.
• Net income and capitalization rates are derived
  from an analysis of returned Income Expense
  forms. Income Expense forms were mailed by
  Tyler CLT in January 2007 requesting detailed
  income expense information from the 2006
  calendar year.
• These forms provide data on local market rents,
  expenses, and vacancies.
• Income approach models are built using the
  analyzed income and expense data and a review of
  recent sales.

12
Model Testing

• Value the sales database using the models.
• Test the results.
• Re-test to refine the model components and
  values.
• Stratify sales into different categories like
  building style, dwelling age, neighborhood,
  building quality grade and condition and physical
  location to validate the model components.

13
Standards for Quality

• The International Association of Assessing
  Officers (IAAO) has developed standards to
  measure the quality of revaluations.
• When completed the revaluation will meet, and, in
  most cases, exceed the standards for a quality
  revaluation set by the IAAO.

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IAAO Standards for Quality

• All Classes
• Measure of Central Tendency 90 - 110
• Price Related Differential (PRD) .98 1.03
• COD (By Class)
• Single Family
• Newer/Homogeneous 10
• Older/Heterogeneous 15
• Rural/Seasonal 20
• Income Properties
• Larger/Urban 15
• Smaller/Rural 20
• Vacant Land 20
• Other Real Personal Various

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What can you expect from this revaluation?

• This Colonial sold on
• October 25, 2005 for
• 575,000
• Current Assessed Value
• 290,400. ASR .51
• Proposed Assessed Value
• 590,100. ASR 1.02

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What can you expect from this revaluation?
This Bi-Level sold on January 30, 2006 for
249,900. Current Assessed Value 126,800. ASR
.51 Proposed Assessed Value 257,300. ASR
1.03
17
What can you expect from this revaluation?
This Old Style sold on June 29, 2006 for
225,000. Current Assessed Value 85,900. ASR
.38 Proposed Assessed Value 222,200. ASR .99
18
What can you expect from this revaluation?
This Cape sold on April 3, 2006 for
210,000. Current Assessed Value 107,900. ASR
.51 Proposed Assessed Value 211,800. ASR
1.00
19
What can you expect from this revaluation?
This Contemporary sold on September 25, 2006
for 320,000. Current Assessed Value 130,500.
ASR .41 Proposed Assessed Value 325,100. ASR
1.02
20
What can you expect from this revaluation?
This Cape sold on August 16, 2006 for
268,800. Current Assessed Value 141,800. ASR
.53 Proposed Assessed Value 264,000. ASR
.98
21
What can you expect from this revaluation?
This Colonial sold on August 18, 2006 for
307,000. Current Assessed Value 160,400. ASR
.52 Proposed Assessed Value 302,900. ASR
.99
22
What can you expect from this revaluation?

• This Ranch sold on
• January 24, 2006 for 198,000
• Current Assessed Value
• 86,000. ASR .43
• Proposed Assessed Value
• 201,800. ASR 1.02

23
What can you expect from this revaluation?

• This Condominium sold on March 31, 2006 for
  118,500
• Current Assessed Value
• 52,200. ASR .44
• Proposed Assessed Value
• 114,400. ASR .97

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What can you expect from this revaluation?

• This Condominium sold on September 27, 2006 for
  157,900
• Current Assessed Value
• 107,600. ASR .68
• Proposed Assessed Value
• 153,000. ASR .97

25
What can you expect from this revaluation?

• This Office building sold on July 19, 2005 for
  875,000
• Current Assessed Value
• 577,600. ASR .66
• Proposed Assessed Value
• 861,300. ASR .98

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What can you expect from this revaluation?

• This Apartment building sold on April 27, 2005
  for 450,000
• Current Assessed Value
• 322,400. ASR .72
• Proposed Assessed Value
• 446,600. ASR .99

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Informal Taxpayer Reviews

• In June each taxpayer in Essex will be mailed a
  notice of change in assessment.
• Every taxpayer will have the opportunity to
  review their new assessment with a representative
  of TylerCLT.
• Reviews will be scheduled by appointment only.

28
Questions Answers

• Thank you for your interest in the 2007 Essex,
  Vermont revaluation.