Many New Jersey property owners feel frustrated with their property tax assessments and the tax dollar amount. As a result, they want to appeal the property tax assessment but have no idea of the process and become frustrated even more. But the good news is that the property tax appeal process is not that difficult and all the information is available online for free. If you have the time, this can be a do- it- yourself task or you can hire a professional such as an appraiser or attorney for assistance. South Jersey Appraisal Associates, LLC offers appraisal and consultation services to help the property owner decide. Here are some answers to the most common questions I received this week as the NJ statewide deadline of April 1, 2019 is quickly approaching.
Can I use my neighbor’s assessment as a basis for my property tax appeal?
No. The tax assessor will not consider any property tax assessment from a neighbor’s property. The most similar comparable sales, either within the neighborhood or outside of the neighborhood, are the only acceptable evidence of market value for a property tax assessment appeal.
Do I need an attorney to petition for a New Jersey property tax assessment appeal?
In most cases, a property owner does not need to hire an attorney to file a property tax assessment appeal. New Jersey allows the property owner or representative of the property to petition the county board of taxation for an appeal. The property owner may prepare his/her own petition or seek the assistance of an attorney, if desired. If the property is in the name of a trust, corporation, or other legal entity, then the property owner must use an attorney.
When is the filing deadline for a New Jersey property tax assessment appeal for this year?
In most of New Jersey, the current filing deadline date is April 1, 2019. However, Monmouth and Gloucester Counties have an earlier filing deadline which is January 15, 2019.
Do I need an appraisal to file a New Jersey property tax assessment appeal?
No, a property owner may ask a real estate agent for help choosing comparable sales for his/her tax appeal or visit the municipal tax office for a list of closed sales that are available to the public. If the property owner chooses, he/she may seek the assistance of a local appraiser; however, if the property owner submits an appraisal as evidence of market value and there is a scheduled hearing, the appraiser must appear in court on behalf of the property owner at a specified. Both the appraisal and the appraiser’s appearance in the hearing require additional fees.
Will I have to attend a hearing for my NJ property tax assessment appeal?
Typically, the board of taxation assigns a hearing date for each petitioner. In some cases, the municipal tax assessor and property owner will agree to a new assessed value. In that case, the municipal tax assessor prepares a Stipulation of Settlement and there is no hearing necessary once it is approved by the county board of taxation. If the assessor does not offer a Stipulation of Settlement, then the property owner must attend a hearing to dispute the property assessment.
For more complete information, visit the NJ Division of Taxation website and South Jersey Appraisal Associates, LLC. Please feel free to call us at 609-214-8418 for a consultation on your property tax assessment.
The biggest question that a home seller will ask is how to maximize the selling potential of a property. Sellers must be aware that current market participants include first- time home buyers who may not have the extra capital to invest in the property after the sale. Therefore, theses buyers search for affordable properties that are move in ready with few or no repair issues. With such a presence of FHA and first-time home buyers, sellers need to prepare the property for the fussiest market participants.
There are a plethora of home improvement shows on television demonstrating how to maximize property selling potential, the shows are mostly geared toward sellers willing to invest exorbitant amounts of money. This is not realistic for most sellers who can only invest a small amount of money to market their property; however, even a small investment can go a long way. Many real estate professionals will agree on the most popular methods to increase profit and decrease marketing time which include some simple solutions to freshen up a tired or outdated decor. So, before you list your property for sale, take a look at a few tips to capitalize on the potential of your property.
Choosing the right real estate agent is the key to successfully marketing your property. Do not just choose and agent by a recommendation from a friend or hire a real estate agent just because he/she is a friend. This is your biggest investment and you must choose an agent wisely so choose one that you trust. and like.
Simple and cost-effective repairs transform a tired property into a fresh listing with a little bit of work and small amount of money. Spending money to prepare your property for selling opens your listing up to all the market participants for the most exposure and shorter marketing times. Stick to a predetermined budget for repairs and updates in order to take full advantage of the potential of your property.
Maria A. Nucci, SCRREA
If you are New Jersey property owner, you probably argue that you are paying an astronomical amount for property taxes. If you believe you are currently taxed at a higher than normal rate, then you have the right to appeal your property tax assessment to your county tax board of taxation. But before you file an assessment appeal, there are a few things to understand. First and foremost, the tax assessor has the presumption of correctness regarding the valuation of the property. In other words, you, the property owner, bear the burden of proof to demonstrate that your tax assessment is unfair.
I am sure you are curious about the property assessment appeal process which I would like to briefly explain. Please bear in mind this is only a short explanation and additional information is necessary to complete the process. I am a residential real estate appraiser which means that my job is estimating an opinion of value for residential real estate. Property assessment appeals are easy enough for you to tackle as a homeowner; however, there are just some properties that are too complex, and you may need a professional opinion. But, if you want to perform a property tax assessment appeal on your own, there are a few guideline to follow for a successful outcome.
The county tax assessor will not consider your neighbor’s property assessment as evidence of what you think your assessment should be. So, it all comes down to selecting three to five comparable sales which are located within the neighborhood, sub development, or close proximity to your property that are similar in size, age, condition, and overall property characteristics. You can visit the municipal tax office for a list of closed sales or enlist the help of a real estate professional. The sales should be arm’s length transactions which means there was no distress on the sale. Sales that have a New Jersey non-usable sale code such as estate sales, foreclosures, short sales, bankruptcy, divorce sales, and other types of distressed properties that sold in your neighborhood should be excluded as comparable sales for your property. Distressed sales are not a reliable indicator of fair market value. Comparable sales should reflect current market value which is the most probable price a property will sell for in an open market with a buyer and seller who are typically motivated and acting in his/her own best interest; both parties are well informed about the market in a reasonable period of time. Payments terms should be cash or the cash equivalency with acceptable financing in the market area.
The comparable sales selected must best demonstrate the characteristics of your property under the appeal process. Be sure to include closed sales which went under contract in the previous tax year with a cut off date of October 1. For example, if you are appealing your 2019 tax assessment, the comparable sales should have a contract date between October 1, 2017 through October 1, 2018. Once you have selected your comparable sales to determine an approximate value for your property, decide if your assessed value is over the common level range. Every municipality has a common level range which changes on a yearly basis and can be found on the county website. There is an upper and lower limit to the common level range which varies by 15% each way. For example, if the common level range is 75%, the upper level limit would be 86.25% and the lower level limit would be 65.21%. For New Jersey residents, the property tax assessment should fall in between the upper and lower limits, but when the assessed value exceeds the upper limits, you can file a tax appeal. Now let’s apply this to an example;
Based on the example above, if your estimated current market value is $300,000, you calculate the common level value using the percentages of 65.21% for the lower limit and 86.25% for the upper limit.
The lower limit for your assessment would be $195,000, the upper limit would be $258,000, and the common level would be $225,000. If your assessed value is over $258,000, you would be eligible to appeal your tax assessment. In contrast, if your assessment is below $195,000 the assessor could actually raise your assessed value. When your estimated value falls within the common level range of $195,000 to $258,000, you are not eligible for an appeal.
After determining that you are over the upper limit, you then file a petition of appeal and pay the applicable fee by the filing cutoff date. For most counties in New Jersey, the deadline to file is April 1, but for Monmouth and Gloucester counties, the deadline is January 15. The original petition of appeal, comparable sales data, and any other applicable proof such as pictures and mapping images to demonstrate property conditions or adverse location condition need to be filed to the county assessor. Copies of your appeal packet should be filed with the municipal assessor as well as the municipal clerk. You also should keep a copy for yourself. If you fail to serve the municipal clerk, county assessor, and municipal assessor, you appeal will be denied. I suggest hand delivery, but you can send by mail or file online which automatically sends your petition and supporting documentation to all parties.
The county will notify you with a court date and you must appear in person before the county tax board to prove your case unless you are represented by an attorney. It is important to note that the county does not typically allow any adjournments, so if you cannot make the specified court date, your petition will be dismissed. In some cases, the municipal assessor will offer a stipulation which is an offer to lower your assessment. In this case, you would not have to attend the hearing if you accept the stipulation; however, it is up to the discretion of the property owner to accept it and forgo the hearing, or decline the stipulation and attend the hearing.
If you decide that the appeal process is more than you want to take on, you can hire an appraiser, but the appraiser must appear in court along with you if the assessor does not offer a stipulation prior to the hearing. The appraisal must be submitted to the county tax assessor, municipal assessor, and clerk at least seven days prior to the hearing date or with your original petition of appeal. Appraisal prices vary based on the complexity of the property and the appraiser will also charge a fee for the court appearance, if necessary.
All information for the New Jersey property tax assessment appeal process can be found online at https://www.state.nj.us/treasury/taxation/lpt/lpt-appeal.shtml
This short article is not intended to be professional advice; this is for informational purposes only and any homeowner should seek the advice the county tax assessor, attorney, or real estate professional prior to filing a property tax assessment appeal.
Many home owners trust the judgement of a realtor to properly price their home to sell. While realtors are trusted professionals in their market areas, they can only provide a comparative market analysis (CMA) to determine a list price for your property. Most CMAs are accurate; however, there are some properties which are atypical for the neighborhood or area that would benefit from a list price appraisal. When a property is priced correctly, sellers minimize their time on the market and maximize the sale price.
Realtors work on commission so naturally, the more your property sells for, the more money they earn. In contrast, if your house does not sell, the realtor invests time and marketing without earning any money at all. The problem occurs when a property sits stagnant on the market; it attracts fewer buyer who think that there is something wrong with the property or that it just overpriced. The solution- a list price appraisal.
I am sure you are asking what the difference is between an appraisal value and a realtor’s CMA, so please let me explain. A realtor chooses several properties like yours to input into a data base and the software generates an automated value. In most cases, for example, in a “cookie cutter” development where houses are similar in age, condition, site size, and interior square footage, a CMA works well. However, in some neighborhoods, houses are in either superior or inferior size, conditions, and property upgrades that a CMA just does not work. The same holds true for a property on a busy road, by an active railway, in a school zone, or on a larger than typical plot of land. If the CMA is inaccurate, so is the listing price.
Appraisals work much differently than CMAs. First and foremost, the appraiser develops an independent opinion of market value. Since the appraiser is a disinterested party who is not working on a commission, the only job of the appraiser is to develop an opinion of fair market value for your property and not an inflated list price. In all fairness, in most cases when a property is overpriced, it is due to pressure that a homeowner with unrealistic expectations places on the realtor. As real estate professionals, we all get it- it is your pride of home ownership and you want to maximum your profit.
Unlike a CMA, a real estate appraiser will inspect your property, measure the dwelling, and sketch a floor plan. A very important component of the appraisal process gathering correct and true property characteristics by visual inspection, such as location, property condition, room count, basement size, and most importantly, the gross living area (GLA) which is the true square footage of the dwelling. Measuring the GLA is not something realtors do; they rely on the tax records which in many instances are incorrect. An incorrect GLA can significantly alter the market value either in a positive or negative way.
After the appraiser assesses all of the relevant property characteristics, he/she will find at least three sold properties within a reasonable period of time and begin a market derived adjustment process for inferior and superior amenities that your property has or lacks as compared to the properties that sold in close proximity to yours. Sometimes, there are none and it becomes the appraiser’s job to determine the value placed on the market reaction to the different locations, amenities or property conditions to develop an opinion of value. Needless to say, this is a much more time-consuming process than creating a CMA as this process takes a lot of time and research.
List price appraisals benefit both buyers and sellers in various ways. For the seller and listing agent, a list price appraisal can determine a list price to quickly and efficiently sell the property for maximum profit. This means a shorter marketing time, more showings from potential buyers, and little or no hassle when the time comes for the lender’s appraisal. Further, a list price appraisal provides proof that the seller performed due diligence regarding the listing price; they did not try to inflate the value. Then, the list price appraisal becomes a great marketing tool; the seller and the listing agent have market data to support the list price. If a buyer submits an offer lower than the appraisal value, the seller has proof that the property is worth more than the offer and the appraisal becomes a bargaining chip for the seller to maximize the sale price.
Most properties sold are financed through banks and local lenders which are subject to an appraisal ordered by the lender. With few exceptions, lenders order appraisals to make sure they are investing their money wisely and the appraisal price is equal to or greater than the contract price. The buyer and the lender are protected by the mortgage process because it becomes a problem when the purchase appraisal value falls short of the contract price. If a buyer is using conventional financing, the buyer must make up for the short fall between the purchase price and the appraisal value. But, some buyers simply will not spend their hard-earned money on a property that is not worth what they are paying. Further, if a buyer is using FHA financing, the appraisal value MUST be equal to or over the contract price of the FHA will not insure the loan. In either case, the buyer will want to renegotiate, or the deal may quickly dissolve.
Some buyers, like first-time home buyers, are shopping outside of their maximum price range offer lower than list price to see if the seller will take less money than the property is worth. If the seller does not know the true market value of the property, the unknowing seller may decide to take the offer and not maximize their value- this happens many times with estate and divorce sales. Of course, no party to the transaction will have to worry about lender appraisal issues. And then there are cash buyers, investors, and flippers investors lurking in every market area. These buyers tend to make offers and not worry about what they are paying because their offers are so low; however, there are some investors who will order a purchase price appraisal to make sure they are not overpaying for the property.
These scenarios are just a few of the many reasons to have a list price appraisal. Bottom line- buyers want to maximize their buying potential while sellers want to maximize their profits. In closing, the list price appraisal serves as a useful tool for both parties to help facilitate a quick and easy real estate transaction.
~Maria A. Nucci, SCRREA
As a real estate appraiser, I begin each day with a cup of coffee while looking over the latest comparable sales in the local multiple listing service; thus the blog name "Comps and Coffee". So...welcome to Comps and Coffee...a place to sit back, relax and learn a little bit about current real estate tips for buyers,sellers and real estate professionals, home repair and improvement tips, home decor ideas, and recipes that make your home smell simply wonderful. I hope you enjoy the content and I welcome any feedback. Thank you for visiting my blog. ~Maria