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Archive for Friday, January 5, 1990

BUSINESS INCREASES

January 5, 1990

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For many property owners, reappraisal has meant higher taxes. But for local real estate appraisers, it has meant more business.

Property owners started calling local appraisers in earnest last spring, when the county mailed out change of value notices. Many property owners requested formal appraisals so they could present documentation to contest the new property values.

A second round of requests for appraisals came after 1989 property tax statements were mailed out in November, and people began planning to pay their taxes under protest.

The state-mandated reappraisal and classification definitely has generated work for appraisers, said local appraiser Larry Hatfield.

"It's like I wrote the bill to create business for myself," he said.

HATFIELD said December and January usually are slow months for appraisers because the real estate market has slowed to a crawl. Most of their work is generated by home sales, because lenders generally require appraisals when people apply for home loans.

"Usually we're self-unemployed right about now," Hatfield said. "We've got a splurge of business that I'm glad to have."

But "it's a one-time thing," he said, noting that most tax protests will get taken care of this year.

County Appraiser Don Gordon said that although reappraisal has given local fee appraisers more business, it hasn't been a windfall.

Only a small percentage of property owners actually had formal appraisals made last spring, he said. Last spring, the county handled more than 6,000 informal appeals, about 750 formal appeals and about 250 appeals before the county's Board of Equalization. Gordon estimated that about 10 percent of the appeals were accompanied by a formal appraisal, or about 700.

ONLY ABOUT 10 percent of those appraisals actually were conducted last spring, Gordon said, explaining that the county accepted appraisals that had been made within the last three years.

That means 70 to 100 appraisals last spring were done specifically for reappraisal, he said.

Gordon said a higher percentage, probably 20 to 25 percent, of the tax protests received since November have been accompanied by an appraisal. Through this week, he said, his office had received close to 400 protests that had been passed along from the county treasurer's office, which meant about 100 more clients for local appraisers.

The overall impact of reappraisal on the appraisers' business isn't that striking, according to Mike Heffner, vice president at Capitol Federal Savings and Loan Assn. Capitol Federal, like other home lenders, employs appraisers when people apply for loans.

HEFFNER SAID that judging by the amount of time it's taking for Capitol Federal's appraisals to be completed, it doesn't appear that appraisers are swamped.

He agreed with Hatfield that the reappraisal-related business is just keeping appraisers busy during a typically slow time of year.

Heffner also said Capitol Federal hasn't paid more for appraisals in the last year.

Hatfield said he's still charging about $200 for residential appraisals in Lawrence, the same as a year ago.

It might not seem cost-effective to pay $200 for an appraisal to save $150 in taxes, Hatfield said, but he tells property owners that they have to look at the long-term effect of a too-high valuation.

"I tell people if $150 is too much in taxes this year, that's $1,500 too much over 10 years," he said.

ALTHOUGH some appraisers charge a flat rate, the cost often is based on the time required for the appraisal, said Phil Harrison, vice president of Gill Real Estate.

Harrison, who does appraisals himself, said it can take a full day to complete the eight-page appraisal form for a typical home.

Another local appraiser, Gene Hardtarfer, said he is charging the same now as he did a year ago. The cost is higher than two years ago, he said, because of the amount of documentation that's required to support the appraisal, and the time that goes into it.

"Most people think it's just a letter," a quick estimate that a real estate agent might do, he said.

Don Newell, who operates Gateway Real Estate with his brother, Kenneth, said their appraisal business has picked up because of reappraisal.

"Some people have no choice but to get it appraised," he said. "Right now is kind of a slack time in real estate," he said, so people shouldn't have too much trouble scheduling an appraisal.

ALTHOUGH the deadline for filing the tax protest form with the county treasurer is Jan. 16, people aren't required to have their appraisal completed by that date, Gordon said.

If a property owner brings a written agreement signed by an appraiser, agreeing to perform the appraisal in the near future, his office will delay the informal hearing, Gordon said.

"But I can't go clear into June, waiting on a fee appraisal," he added.

Hardtarfer said he's also been busy in recent weeks. "It seems as though a lot of folks have waited until the last minute."

Hardtarfer said he has a two- to three-week backlog. But even with reappraisal-related appraisals, he's not as busy as he was a few years ago.

"Two years ago, when we had such a strong level of (real estate) activity, we were 60 days behind," he said.

HARDTARFER, who has been an appraiser full time since 1981 and did appraisals for years before that as a real estate agent, said he's noticed more competition in Lawrence.

"I was kind of surprised when I looked at the Yellow Pages this year," he said.

But he said the growing number of appraisers can be traced to the city's strong real estate market, not reappraisal.

Although there is no licensing required of appraisers, Hardtarfer said most full-time appraisers belong to one of two national professional organizations, the Society of Real Estate Appraisers, which he's affiliated with, or the Institute of Real Estate Appraisers.

Mortgage companies monitor their work closely and ask new appraisers to supply examples of their work, he said.

"There's quite a few people who look over your shoulder when you make an appraisal," he said.

And professional licensing is probably just a year or two away in Kansas, he said. A bill that would require appraisers to be licensed is in legislative committee now, he explained.

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