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Smart Moves for Home Owners in Turbulent Times, Part 2 - 2008-10-05
It's well known that the financial markets hate uncertainty. And in a way, the same can be said for the real estate market. I am convinced that much of the uncertainty facing today's real estate investor will be resolved in the next few months.

In the meantime, it's hard to know exactly which moves to make. No one knows for sure what the future holds. However, if you own real estate, the following suggestions might very well save you money, and that's always a good course to follow.

1. Protest your Property Tax Assessment.

Each year, your county tax assessor sends you a notice of valuation telling you how much the county thinks your house is worth. Because some counties have been aggressively raising assessments while the real estate sales market has cooled, there are many communities where some of the homes are simply over-valued for tax purposes.

The question to ask yourself is this: Would I be willing to sell my house for the county suggested "market value" if someone offered it to me?

If yes, you might very well benefit from protesting your assessment. If not, you might want to re-think the process.

Typically, protesting your assessment is as simple as sending in a letter notifying the tax assessor, and letting them know what you believe to be a more accurate valuation. Remember that real estate values are most often based on recent comparable sales in your neighborhood, so it can be very helpful to enlist the aid of a local real estate professional.

Most often, the tax assessor will notify you that they have reviewed their data and that they are unwilling to lower their original assessment. If that happens, or if the amount they propose is still not low enough, you can move to the next step.

2. Appeal your valuation to your Board of Equalization. In order to appeal, you must send a brief letter to the Board, notifying them that you wish to appeal the decision of the tax assessor.

It is not allowable to appeal based on the fact that your taxes went up too much all of a sudden, even though that may have happened. Instead, you should state that your appeal is based on "valuation and lack of equalization." In other words, you believe your house is not worth as much as the assessor does, and that there may be others in your neighborhood with nicer houses and lower tax bills. Each of these is a valid basis for an appeal.

At your appeal hearing, you will be given five minutes or so to meet with the Board and present your case. Usually, these are three citizens just like you who have agreed to serve in this capacity. My advice is to present evidence of at least three similar homes in your neighborhood which sold before January of this year. Hopefully, their average selling price will be lower than the county's valuation of your house. As further evidence of a need for an adjustment, you can also point out more desirable homes in your neighborhood that are valued at a lower amount than your home.

History tells us that you have a one in three chance of getting your valuation lowered if you will go this far in the process.

3. If you are still not satisfied with the county valuation of your home, you may appeal the Board's decision to the Superior Court of local jurisdiction. Know that there are fees involved and that you may want legal representation for this step. Most taxpayers decide it's not worth the additional time and expense to pursue a reduction in property tax valuation at this level.

Even so, I have talked to homeowners who represented themselves and went to court to tell their side of the story to a judge. They felt it was worth the effort.

4. Consider Buying Real Estate Now.

The reality is that real estate is on sale and interest rates are still very low. By definition, that makes this a good time to consider adding a rental house to your investment portfolio.

I am not suggesting that you go out and buy twenty houses between now and January. But I am suggesting that this market will stabilize and rebound, and when it does, the bargains we are passing by today may no longer be available.
 
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One of the significant annual expenses faced by any Georgia property owner is ad valorem property tax. Depending on where you live, it can be as high as three percent of the property's fair market value, and it must be paid year after year after year.

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5. Proactively meet with your Appraiser to reach an agreement
6. Protest your Notice of Assessment in an Intelligent manner
7. Give the Assessor an Opportunity to Save Face
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