Following is a laundry list of valuation complications presented to Dixie Phair by some Any Municipality County officials. They compiled the list after hearing about appeals in other districts, and wanted to know Dixie’s plans for tackling:
- functional obsolescence
- underlying land lease
- architecture just declared historically significant
- encumbered by a lease that is below market or above market
- your brother-in-law owns it
As the County’s Commercial Real Property Analyst, Dixie first stated that she is very familiar with those complications and agreed that they all serve to slow down the valuation process. Dixie explained that while everyone is on their own with the brother-in-law, the other complications listed above are each too variable to accurately handle in a valuation model; they require additional time and appraisal expertise.
Dixie articulated the dilemma by repeating that four of the five laundry list items are too variable to model. But, she then also confirmed that modeling can definitely help! She realized those two seemingly contradictory statements caused confusion among the County officials, so she asked them to hang in there, and continued…
She clarified that she is already employing models to assess commercial and industrial property. Her modeling is successful because most commercial, industrial, and even multifamily properties are cookie cutter tenant boxes of predictable use, utility, and desirability in the market. Her model is fast as well as accurate because it includes a reasonable, straightforward ranking and adjustment process.
Dixie then summarized by saying that by successfully modeling the typical properties, she frees up valuable appraisal time which can be spent on properties with complications, such as those on the laundry list.
One of the County officials, less concerned about the laundry list and focused only on the cost of Dixie’s model, asked for further explanation. Dixie replied that trying to keep commercial & industrial assessments accurate and current in the market without models would be like doing the laundry one article of clothing at a time… every tax date. All County officials now understood and were confident that Dixie’s strategy (using modeling to gain valuable time) gives her the ability to handle any laundry list!