The Assessment Con: The Big Lie at the Heart of Computer-Assisted Mass Appraisal by Adams Daniel

Author:Adams, Daniel
Language: eng
Format: epub
Published: 2024-11-23T00:00:00+00:00

Chapter 12

The Use and Misuse of a Controversial Term: ‘Chasing the Sale’

What is “chasing the sale,” and why is it viewed as a bad thing? What we find out, when we parse the term, is that some alleged instances of “chasing the sale” don’t really fit the definition. Still, assessors like to wield “chasing the sale” as a pejorative term to push us toward their models.

If one thing riles up the normally staid and starchy International Association of Assessing Officers, it’s the practice of “chasing the sale,” sometimes known as a “spot reassessment.” The assessors’ group, in a rare moment of overheated prose, calls the activity “loathsome.”

But what is “chasing the sale” exactly? And why is it seen as being so bad?

The answers to these questions turn out to be quite revealing.

For a definition of “chasing the sale,” a good place to start is back in Routt County, Colorado. Last chapter, we examined a property tax appeal that took place there. During that hearing, the county assessor took a few moments to explain sales chasing. What he said (according to the meeting notes) is interesting in several ways:

“It is not a simple term to define because it means different things to different people. Sales chasing is the practice of using the sale of the property to trigger a change in its appraised value; in contrast the appraised value of the unsold property is not changed. One thing to consider is if we are valuing the unsold properties the same as the sold properties.”

“Means different things to different people” doesn’t sound like a promising beginning. Ambiguity can be exploited in arguments. Remember market value vs. True Market Value? Later, we’ll see a possible reason for this ambiguity: because assessors actually like doing certain things that could be confused with sales chasing.

Still, this inauspicious start quickly turns the corner into what’s actually a pretty solid definition: “Sales chasing is the practice of using the sale of the property to trigger a change in its appraised value; in contrast the appraised value of the unsold property is not changed.” That’s a bit abstract, so let’s consider an example to appreciate why sales chasing can be bad.

In Anytown, U.S.A., there hasn’t been a mass reassessment in 30 years. The town’s assessor knows the appraisals are out of whack. So he comes up with what he thinks is a simple, ingenious solution. The town has 50,000 residential properties. Three thousand sold during the past year in valid, arm’s-length transactions.

The assessor knows that a good, recent sale price is the best indicator of a property’s market value. So he changes those 3,000 assessed values to the sale prices. The property owners, it seems, have no grounds for complaint: after all, they’re being taxed on what they paid for their homes—no more, no less.

But what if it turns out that, on average, homes in Anytown are being assessed at 50% less than market value? In that case, what the assessor did seems terribly unfair. Say my house

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