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Transcript of JoCo on the Go podcast 2/3/20

Theresa Freed: [00:00] On this week's episode hear from Johnson County's new Director of Appraisal Operations. He'll give you an idea of whether you can expect values to go up or down in your neighborhood. He'll also talk about how you can appeal an appraisal if you don't agree with the assessment. Also hear from a Johnson County valuation expert who will provide some insight into how appraisals impact the return on your real estate investment.

Announcer: [00:23] Whether you live in or just love Johnson County, Kansas, JoCo on the Go has everything Johnson County. Here's what's happening and what's coming up in the community you call home.

Theresa Freed: [00:36] Thanks for joining us for JoCo on the Go. I'm your host, Theresa Freed, a Johnson County resident and employee of Johnson County government. Depending on whether you're planning to stay in your home long-term or are ready to sell, watching property values increase in Johnson County can seem like a blessing or a curse. Today we're talking about the appraisal process, a timely discussion because those notices of appraised value will soon hit the mailboxes. To shed some light on this topic, we have with us Johnson County's new Director of Appraisal Operations, Beau Boisvert. And we also have Jeff Ramsey who's a residential real estate valuation manager with the County. Thank you both for being here today. So first Beau, can you tell us a little bit about your background and how you came to Johnson County?

Beau Boisvert: [01:19] Sure, I can. I came from Arizona. I spent 24 years in the assessment world there between two of the different counties Yavapai County and Maricopa County, which is actually the Phoenix metropolitan area. So I was the Chief Appraiser for Maricopa County for 4 years and was actually thinking about retiring and saw the opportunity and I thought, well since I'm still kind of young, I'd like to still do something. So I took the chance to move to a new state and start over.

Theresa Freed: [01:46] All right, that sounds good. And Jeff, can you share a little bit about the work that you're doing?

Jeff Ramsey: [01:50] Sure. I've been with the Johnson County a little over 22 years, all of it in residential real estate. Currently I'm in... my team basically appraises all of the residential property within the County. Everything from single family, multifamily duplex condominium, agricultural properties. So if it's, if it's a residential property, then that's in my wheelhouse.

Theresa Freed: [02:14] Okay. All right, well, great to have you both here again. And if we can go into a little bit about the actual work of, of doing an appraisal. Can you talk about that?

Beau Boisvert: [02:22] Oh, sure. So what our goal is to determine the market value of the properties within the County so that we can use that value to help the jurisdictions with their taxes. So they use our value that we do an assessed value, which is a percentage of the actual market value. And then assessed value then gets multiplied by the, the levy, the mill rate here, and then that allows us to know what our taxes will be so the jurisdictions what their potential income is so that can run their businesses.

Theresa Freed: [02:53] Okay. And so when you actually do an appraisal, you are in an office doing that work or are people actually going out and taking a look at the house or, or business?

Beau Boisvert: [03:05] We do it different ways. We do some what we call desktop reviews, especially if we were at the property fairly recently. We also do go to the field to field inspections by state law. We're required to field inspect every six years, all properties within the County. So we're doing that, meet that requirement. We also look at the permits and that tells us when things are being changed on our property. So we know we need to go out and look at it, relist the property, see what the changes are. And then we also have our staff that, you know, drive out, we use the aerials to double check for new construction or changes.

Theresa Freed: [03:41] I imagine technology really impacts the way you guys do your work in terms of it, just being able to access things very quickly. When you talk about the aerial view, I mean I know we have a department here that is very helpful with those sorts of things. So how has technology impacted that?

Beau Boisvert: [03:58] Well, technology has saved having to have an extensive number of physical staff members. So what used to take, you know, 20 or 30 more appraisers to do the work we can do with a lot less staff. We only have 84 people on staff now of which about, a little over half, are the appraisal staff and then we have our other services. But otherwise if we didn't have technology, aerials, and the computer systems that can help us do our work, we'd actually have to double even triple our staff in order to physically get out and get the work done. That'd be our only option would be to physically do it.

Theresa Freed: [04:36] Okay. And I'm sure people wonder, you know, if they've made some sort of, you know, remodel to their house or added a deck onto the back or anything like that. What are the sorts of things that can affect the actual value of the home?

Beau Boisvert: [04:50] Well, usually the a, it's going to be any type of remodel that you do. And it also depends on the extent of this, of that remodel. So when you have an age on a property, so a house typically has a lifespan of about 50 years. So if you have a house and you're living in it and it's 15 years old today and you go in and remodel. So the interior like kitchen and the bathrooms or you add on to your garage that's going to change that effective age of the house is no longer going to be 15 years old. When we do the math, it could be eight years old, it could be 10 years old, which means the life of your building has now expanded beyond the original 50 years. That's one of the key pieces of establishing value for property is to know what that life span is of it first.

Theresa Freed: [05:39] Okay. And then how do you know what's been done on the inside if you're only looking at the outside? Do people have to report that?

Jeff Ramsey: [05:47] Part of it is through our, our review. When we go out and we review the properties in the field, we'll knock on the doors and if somebody's home we'll interview them about the condition of the property, any updates or upgrades they've made. We've got a very good relationship with the cities and municipalities throughout the County. So when a permit is taken out for, whether a remodel or a basement finish, or new construction, whatever it may be, those permits are forwarded to our office. And then that triggers, within our office, that triggers us to send an appraiser out to knock on the door to verify what's been going on with that. One of the other ways that we find out about upgrades and updates and remodels to homes is when they actually sell. When we read those realtor comments on the MLS we can oftentimes see significant amounts of remodels that maybe are a year or two old. They may be four or five years old. We don't really know, but we can tell that it's certainly had some updating that we may not have been aware of. And so having access to those resources, the permits from the cities the MLS data information and the photographs is hugely helpful for us to make sure that our data is accurate. And that's really the cornerstone of getting a sound appraisal on a property. If you don't have accurate data, then the value will never be right. And so we've got to get that right first.

Theresa Freed: [07:01] Okay. And are there certain things that people can do to their home to increase, or lower the value for this purpose? I've, I've heard that pools can, can actually lower the value of a home. I don't know if that's accurate, but can you talk a little bit about that?

Jeff Ramsey: [07:17] Sure. The things that most people will do to their home to increase the value to make it more, more desirable or use it for, for themselves are the typically the things that are going to drive value as well. Updating the interior remodeling the kitchen and bathrooms to more current standards and things are, are typically going to be very helpful both in the resale value of a home but also in the appraisal value. Whether it is an appraisal for, for ad valorem or for tax purposes for us or for the bank appraisals. So remodels adding additional square footage either in the basement or a room addition and things like that are typically going to add some value to home. Things like swimming pools are a little tricky because if for example, if, if I've got a home with a pool that I'm trying to sell, people that want a pool are going to look at that home and probably going to pay a little bit of a premium because it already has a pool. Those that do not want a pool probably won't even look at it. So in our valuation system, we have a nominal addition to value for the pools because there was a cost associated with adding that pool and all those kinds of things. But pools and things like that are not generally strong value drivers. Generally you're going to be looking at remodels, condition overall, things like that and making sure it's up to date with today's standards square footage is always, always gonna drive value to a certain extent. Location can be key as well in areas where you might have a golf course or a lake community, things like that. Those homes that back to those amenities are typically gonna bring a little bit of a premium in the marketplace. And that's really our, our goal and our task is to value at what a home would sell for. And the best way that we know to find out what a home might sell for is to look at what other similar homes have already sold for. And so the market is what really drives the value.

Theresa Freed: [09:10] Yeah, that makes sense. Okay. So what's on everyone's mind, I guess is probably very obvious and it's, it's, you know, is the value going up or is it going down? Is it staying steady? Are there certain parts of our County where we can see the biggest changes?

Jeff Ramsey: [09:29] Yes, overall. We haven't quite finished our evaluation process, but we are, we're far enough along where we've got a reasonable idea of what the trends are and what we're seeing right now is throughout the County as a whole, values are continuing to go up, although not as much as they have gone up in the past two to three to four years. So the market has still been relatively strong, but it has not been. The real estate market doesn't seem to be climbing as fast as it was for the past couple, 3 years. The areas of the County that still see the strongest market are kind of the Northeast areas, which is no real surprise. North Overland Park, Merriam, Roeland Park, Prairie Village to a certain extent the larger lots in Prairie Village especially. But that Northeast corner inside the 435 loop, we'll probably see on average some of the larger increases when we start looking at some of the other areas. Central Olathe, South Olathe, they're still increasing, but probably a little bit more moderate. We're starting to see this year also some, some areas where the trends might start be going, going down a little bit. Certain subdivisions or pockets where the sales have kind of flattened off a little bit. And so we probably have a few more parcels this year that might be ticking down in value than we had last year as well.

Theresa Freed: [10:48] Okay. And do you know the general areas for those or are they just kind of all over the place?

Jeff Ramsey: [10:52] They're kind of scattered throughout the County, but I would say probably more outside the 435 loop than inside. Inside the 435 loop still is, is really pretty strong.

Theresa Freed: [11:02] Okay. That makes sense? All right. So I know that sometimes there's just a bit of confusion about taxes versus appraisals and so can you kind of clear up that?

Beau Boisvert: [11:11] The taxes of course is what we pay for our property that we own. The appraisal part of it is, is basically really to determine what is the value of the property if it was in the open market for sale? And the correlation is just strictly what we, what we have is the value that was set for the property. Then we use a portion of that value, the assessed value against the tax rate to create your taxes. So obviously if the value is lower, the taxes, the tax rate doesn't change per property. So it's the same tax rate, therefore you pay a little bit less. If the value is up, obviously the taxes are gonna go up a little bit. But then also depends on what your schools, your cities and all jurisdictions are going to determine as their actual tax base. And so a lot of the times we hear complaints about, you know, you raised our taxes well, we had a part in it. We deal with the value, which by law we're supposed to establish the market value, but the tax rate in and of itself is a different piece that we don't have any control over. We don't know what the city is going to do or the town's going to do or that school district's going to do in terms of their needs. And I think a lot of times the public doesn't realize that it's both pieces of the, of the teeter totter.

Theresa Freed: [12:27] Okay. And so we just play a portion of that. And then also people want to know how do they receive their notices of appraise values. And when did those come out?

Beau Boisvert: [12:36] We mail them out every year on or before March 1st. And so we're right in the process now, as Jeff was saying, finishing our analysis so that we can finalize our, our numbers and then we're going to be sending them to the printer and then the printer will print them out and be mailing them off. And so we're still on track to be out by March 1 for the notices for the real property.

Theresa Freed: [12:59] Okay. And people can receive that information online as well? Okay. And the online information is pretty extensive. You don't just get your notice of appraised value, but you can also find out some pretty detailed information about your property. Do you want to share a little bit about that?

Jeff Ramsey: [13:14] We have a mountain of information about...out on our website. Everything from property specific information, the data characteristics of a property, and I think it's helpful for people to go out and verify that information, make sure that our bedroom and bathroom count looks right and make sure that our square footage looks right. So there's that property specific information that's out there. You can also look at the comparable sales report for looking at the sales that we used in the valuation of that individual property, a copy of the sketches out there as well. But there's also a lot of information about sales from the subdivision that you can access out on our website. There are a broader reports available as far as our annual reevaluation report which really breaks down all aspects of the valuation for the County, for commercial and residential property as well. And you can, you can, you can dial in to look at what's the average value increased by zip code or by city. And so there's just a huge amount of information available out there that that we find more and more people each year access. We've got a video that we have posted on our website that kind of breaks down the appraisal process in in pretty fundamental terms, but I think it's very good information to kind of explain how the appraisal process works, how the appeal process works, the correlation between appraised value and taxes as Beau was talking. So it kind of, it, it just kind of puts it in a format that I think is very understandable for everybody.

Theresa Freed: [14:48] Yeah, I think it's a great video too and it's, it's very good information. So we'll have the link to that video on our show notes for this episode. So say that I'm selling my house and the appraisal that Johnson County does is different from when the mortgage company is ordering evaluation of the home. Can you talk about what the differences between that?

Beau Boisvert: [15:06] Sure. So what we're talking about is when you're selling your house or you're getting a refinance, what you're doing is a fee appraisal, which is an individual review of your property. And the appraiser goes out and they are trying to find three or four, maybe five comparables, where they're going to make adjustments to those comparables to look exactly like, or as close as they can to the subject property. At the end of those adjustments are going to come up with a dollar amount for each of those comparables. And the appraiser's gonna look at those comparables and they're going to decide which one best represents the subject. And then they're going to apply that value to the subject so that the bank or the buyer and the seller know what is the market value of that property. In our case, even though we use the same methodologies and the same approaches to value, we're looking at valuing thousands of properties or hundreds of properties by using the sales, the same sales and the same adjustments. But we're doing hundreds and thousands at a time. So really the only differences is we're trying to establish statistically a value for multitude of properties versus one individual property. That's really the biggest difference between the two. I think a lot of people get confused by that because they hear mass, they go, oh my gosh, you know, you're throwing everything into a can, shaking it up, and then whatever it comes out first is what you get. But it has a definitely a method in this, the same methodology that is used in the fee appraisal.

Theresa Freed: [16:30] Okay, that makes sense. So if property owners don't agree with the appraised value that comes back, what can they do about that?

Jeff Ramsey: [16:38] The first step would be to turn your value notice over and complete your appeal form. I always encourage people, if you, if you really believe that your home would not sell for what we have it valued at, by all means appeal that property value. We want to make sure that we have considered everything in the valuation of that property. There are things that we may not know about the interior, the condition of the property. And that really gives that opportunity for that property owner to come in and sit down and talk with one of our appraisers and explain what's going on with their home. And our appraiser can explain how we got to our value. And so that that informal appeal process is, is really more of an exchange of information than it is a an appeal. It, it's called an appeal, but, but we really look at it very informally. It's one of our rare opportunities to sit down and talk with the property owners on a one on one basis. And so that process is traditionally has just been you mail your form in last year we started a new process where you can actually complete that appeal form online. And so last year was the first year for doing that and it was very, very successful. A number of property owners took advantage of that. And so hope that people will continue to take care of, take advantage of that convenience because it really, I think has been a huge thing. Our appeals, generally speaking we do about 60 to 65% of them over the telephone, which once again has been a very large convenience factor for the property owners. They don't have to take time to leave work, drive to our facility, park, sit in the waiting room and then go through the appeal process and then do it all backwards to get back to work. A 20 minute phone call. And, and that's really all the time commitment that that's going to require. So we have a large number of people that do take advantage of that telephone hearing process as well. And then something also last year that we kind of started doing where if a property owner has evidence that they want us to consider, but they don't really feel the need to come in, they can just submit that evidence either electronically or they can drop it by the office either way. And then we can consider that information and make a, make evaluation determination based on that. And that's one of the options on that appeal form that they'll receive on the backside of their value notice. They can always check that hearing based on evidence if they prefer to go that route and we'd be more than happy to consider whatever evidence they provide.

Theresa Freed: [18:57] Okay. And it is worth that time if you really feel there's a discrepancy because as I understand maybe was it last year that about half of those who filed an appeal had some sort of adjustment?

Jeff Ramsey: [19:09] Yeah, that's correct. About half, you know, sometimes a little, some years, a little more, some years, a little less. But typically what we see is about half of those that appeal, see some type of a reduction depends a little bit on the nature of their appeal. It depends a little bit on the information that's exchanged. Like I said, sometimes there are things condition-wise that we don't know about. So a property owner may bring in photographs of that of that damage or whatever's going on. They might bring in a recent appraisal they had from a refinance. They may have just bought the property and we weren't aware that the sale had occurred and so they'll bring in documentation pertaining to that sale and so forth. So we want to make sure that we're considering any of that information and as you had indicated, yeah, about half of the people that do appeal get some sort of a reduction. If a property owner is not satisfied at the informal level, there are subsequent appeal levels that they can appeal on to if they want to as well.

Theresa Freed: [20:02] All right, well that sounds good. Bottom line is keep an eye out for your notice of appraised value and don't just throw away your mail because it looks like junk. It's not necessarily, and if you have an appeal that you feel needs to be filed, do so and you can do that online. All right. Thank you both for being here today.

Announcer: [20:18] You just heard JoCo on the Go. Join us next time for more everything Johnson County. Have a topic you want to discuss, we want to hear from you? Follow us on Facebook and Twitter at JoCoGov. For more on this podcast, visit jocoov.org/podcast. Thanks for listening.