Assessors are charged with the responsibility of administering a...
uniform and equitable assessment system
March 17, 1987
Assessors Certification Act - all assessors had to be certified by STEB
March 17, 1992
Responsibility to certify assessors switched from STEB to the State Board of Certified Real Estate Appraisers
5 things in order to be certified by the State Board of Certified Real Estate Appraisers
-high school diploma/GED/two years of assessing experience
-18 years old
-must be a resident of this Commonwealth for at least 6 months
-90 hours of classes
-this act does not apply to counties of the first class (Philadelphia)
Re-certification
-assessors must be re-certified every two years
-28 hours of continuing education are needed every two years
-of those 28 hours, 7 must be USPAP and 2 must be Act 28
Ethics
-promote and preserve public trust
-an appraiser must perform assignments ethically and competently in accordance with USPAP
-must keep records for 5 years, plus an extra 2 years if there is a court case
Public Relations
-assessment office should consider itself a goodwill ambassador of the taxation process and county government
-public access to property record cards, maps, tax duplicates, Purdons, policies, etc.
-always make sure the taxpayer aware of the right to appea
ad valorem
Latin for "at value"
-the ad valorem tax is based on the value of tangible and intangible property
Title 53 in Purdons
numerous PA statutes regarding assessments and taxation can be found here
Uniformity Clause/Article 8 of the PA Constitution
all persons and property (both tangible and intangible) will be assessed uniformly as a class
Real Estate
the physical land and everything permanently attached to it
Real Property
sum of the tangible and intangible rights in lands and improvements to land
Personal Property
movable items not permanently affixed to or part of the real estate
Common Level Ratio
the ratio of the current existing assessments to the current validated sales price of properties that have sold
-certified by STEB each year
- - must certify BY July 1
- -must certify ON or BEFORE June 30
September 1
last day to appeal an annual assessment
October 31
all appeals must be heard and decided upon by this date
November 15
all notice of appeal decisions must be mailed
What are the function of an assessor?
to discover, list, and value property - these functions are never-ending and must be completed on an annual basis
Methods of Discovery
deeds, subdivision plans, aerial and tax maps, GIS, permits, and field reviews
Value
the present WORTH of future benefits arising from the ownership of real property
Cost
the SACRIFICE MADE in terms of money, time, or labor to acquire property
Price
the quantity of one thing which is exchanged for another; the amount of MONEY paid, asked, or offered
-price sets the upper limit
Market Value
the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale
5 Conditions for Market Value
1 - buyer and seller are typically motivated
2 - both parties are well informed and acting in their own best interest
3 - a reasonable time is allowed for exposure in the open market
4 - payment is made in terms of cash or financial arrangements
5 - the p
Warranty Deed
the grantor warrants the title to be good and agrees to defend the title against all parties
Quit Claim Deed
the grantor conveys only that interest he or she may have in the property, no warranty - buyer beware!
Fee Simple Title
the greatest degree of ownership, it is free and clear of all encumbrances
2 Types of Personal Property
chattel - personal property that is NOT permanently affixed to the land
fixture - personal property that IS permanently affixed to the land
Bundle of Rights
S - sell
L - lease
U - use
G - give away
E - enter and exit
R - refuse to do anything with
Public and private limitations to ownership of property
P - police power
E - escheat (gov't repossession when taxes aren't paid or when there are no legal heirs when the landowner dies)
E - eminent domain
T - taxation
To have value a property must have these three things...
(The Concepts of Value)
utility, scarcity, and desirability
Arm's Length Transaction
buyer and seller each acting prudently, neither is under undue duress, price is probable and fair
Highest and Best Use
(The Cornerstone in your Appraisal)
the use that will generate the highest net return to the property over a reasonable period of time, it is determined by considering the current use as well as any proposed use of the property (any proposed use should be probable/NOT speculative, legal, an
Principle of Anticipation
implies that market value is the present worth of the anticipated future benefits derived from the property
but do NOT speculate
Principle of Balance*
4 agents of production - labor, management, capitol, and land
Principle of Change
implies that market value is NEVER constant
*date your appraisal!
Principle of Competition*
implies excess profits breed ruinous competition - a neighborhood can only support a certain amount of one type of facility
Principle of Conformity
maximum market value is attained when there is a reasonable amount of social and economic similarity in a neighborhood
ex - a 2 story mansion in a neighborhood of ranch houses will never reach full market value
Principle of Consistent Use
when valuing a property the appraiser must value the property as a unit and not value the components separately, can't value building for one use and land for another
ex - Walmart buys the residential property next door to build a parking lot
Principle of Contribution
(this one's important)
the value of individual property improvements depends on their contribution to the whole property
cost does not equal value!!!
Principle of Increasing and Decreasing Returns*
when you add an improvement to a house
- if you add a pool to a house in Alaska it probably won't increase the market value (less desirable - more work, not really warm, not much use)
- but if you add a pool to a home in Florida it would definitely increa
Principle of Progression and Regression
a big house in a neighborhood with small houses won't sell for as much as it would in a neighborhood with big houses
a small house in a neighborhood with large houses will sell for more than it would in a neighborhood with small homes
Principle of Substitution*
a prudent buyer would not pay more for a property than what he could purchase an equally desirable and useful substitute
basis of the 3 approaches to value - cost, sales comparison, and income
Principle of Supply and Demand
self explanatory!
Principle of Surplus Productivity*
the net income remaining after the cost of the agents of production have been satisfied
Agents of Production
labor/wages, management/coordination, capitol or improvements, and land
Life Cycle of a Neighborhood
-growth
-stability
-decline
-rehabilitation
4 Forces that Affect Neighborhoods
P - physical (LOCATION^3)
E - economic
G - legal/governmental
S - social
these are analyzed in every appraisal
7 Steps in the Appraisal Process
1 - define the reason for the appraisal
2 - identify the scope of work
3 - plan your work and be prepared
4 - collect data and analyze it
5 - determine the highest and best use
6 - apply the data you collected to the 3 approaches
7 - reconciliation (decid
Gross Rent Multiplier
a unit of comparison that is used to estimate value
annual gross rent / sales price of property
Effective Tax Rate
the relationship between the market value of a property and the established tax rate (aka PDR)
millage x CLR
Value in Exchange
the amount of money an informed purchaser would offer in exchange for any economic goods under any given market condition (aka market value)
Depreciation
the loss of utility and therefore value, deterioration
Gross Living Area
any area of a residence that is above ground, finished, and heated
excludes garages, decks, porches, etc.