appraising vs consulting?

Question

I hold an appraisal license...Can I represent someone for a tax appeal as a "consultant"? USPAP is very confusing to me on this issue. If so, how do you seperate the two, what is a normal fee for consulting residential property owners on tax appeals, and are there any legal ramifications? Also, I work for a lending institution and would this even be possible? Conflict of interest possibly? I'm thinking of ways to supplement income in down times, and wondering if this would work? If I do tax appeals, maybe just do properties in areas I know I would never do appraisal work? All answers appreciated

Answer 1

I used to work for a firm that was dedicated to tax appeals. I left that company and now work as a commercial real estate appraiser. First, this definetely is a grey area of appraising. If you were to aid property owners in tax appeals there are different ways to go about it. At this firm (tax appeal) we never presented full appraisals they were more like CMA's however the program adjusted for size of property, square feet, finished basement and for time. The opposing side were appraisal firms and they prepared a replica of what we had but just different comps (used same program). In our discussions they had told me they were unable to appraise property in that county. The county used to outsource the tax appeals to neighboring appraisal firms but now are hiring their own employees. The discussions were with the new employees about appraising in the same county which they were not allowed to (taken into fact they are county employees now).
Another brain twister. A fellow appraiser I met at school does tax appeals for commercial property. He challenges values for commercial owners against the county. I'm not sure if does additional work but I would bank that he takes other work in the County besides tax appeals.
Last brain twister. At my current firm we handle alot of work for the county in acquisitions/eminent domain etc. We also represent the County in a matter of affairs in court etc. A prospective client had asked us if could represent them against County in a dispute. We did not take the assignment because we work with the county and didn't want to loose their business with them however we could have if we wanted.
Conclusion
An appraisal is an unbiased opinion of value. Your compensation should not be based upon value. If you do tax appeals your appraisal must be lower than the county tax assessor's value if not you will not get a reduction. This is kind of a conflict of interest. Also, you get compensated 50% of the tax reduction amount. You only get paid if you get a reduction. It usually takes a full year to get compensated. Alot of headaches collecting from owners; at least in my county instead of sending checks to owners for their reduction, they just lower the tax bill and you are responsible for collecting from owners. It can be a headache. I guess you can do both but you should not present them as an appraisal but more like CMA's (these CMA's we presented were not signed off on, we did not physically inspect them or the comps and we used computer images from the county website.) I hope that helped you somewhat. E-mail me if you have anymore questions.