Chat with Marion Johnson, Douglas County appraiser

Welcome to our online chat with Marion Johnson, Douglas County appraiser.

The chat took place on Thursday, March 9, at 1:30 PM and is now closed, but you can read the full transcript on this page.

Moderator: Good afternoon and welcome to our chat today with Douglas County Appraiser Marion Johnson.

I’m Dave Toplikar, World Online editor, and I’ll be moderating today’s chat.

Marion, thanks for coming down to our offices today.

County valuation arrived in the mailboxes recently and we’ve got lots of people eager to ask questions.

County Appraiser Marion Johnson: Thanks Dave.

Suzy, Lawrence: Mr. Johnson,

When I put one of my properties on the market in the very near future, what do I tell prospective buyers when they look at the county valuation? Since I feel that property will not sell for anything near the $140,000 county value, I am planning to list the house for at least $10,000 less. I base my assumption on the fact that an IDENTICAL house two doors down sat on the market for 6 months and finally sold for $118,000. Another house that is almost identical down the street sat for many months and sold for $118,000 as well. That indicates to me that my house is overvalued. The county has put me in an awkward position, since I do not have years to wait for the house to sell for what the county says it is worth. I always thought that something is worth “what a person is willing to pay for it”. Will the county buy my house for $140,000?

Marion Johnson discusses property values with readers online.

County Appraiser Marion Johnson: If you list your property on the market and it sells for less than what the county has it valued at that sale price would be used to value the property the following year provided it is an open market transaction. Also if you feel your value is to high this year you may fill out the appeal form on the back of the valuation notice and come into the office for an informal hearing with the appraiser who valued your property. The answer to your last question is no, the county does not by property at what we appraiser it for.

Jean, Lawrence: How can a taxpayer obtain the property details for the properties that are cited as the “comparative sales” on which a new assessment value has been based?

County Appraiser Marion Johnson: The comparative sale information is available in the appraiser’s office. You may either stop by the office or call the office and the comparable sales data will be sent you.

Debbie, Lawrence: How do you determine what comparison homes to use when determining the appraised value of a home?

County Appraiser Marion Johnson: We used an automated valuation system. In that system we determine the main characteristics that determine value in the market place for example location and size. Once that is done we then use the characteristics to pull the most comparable properties that have sold. We only use sale properties as comparable properties in the valuation process.

J., Lawrence: How come property valves in Baldwin and Eudora (they have new housing construction also), only went up $2000-$4000 and Lawrence went up $8000-$11,000?

County Appraiser Marion Johnson: The properties in both Eudora and Baldwin were valued using the same methodology as used in the City of Lawrence. In fact values in Eudora were up between five to six percent on the average and in Baldwin the increases average six to seven percent. Both of those increases are very comparable to the value increases in the City of Lawrence.

David, Lawrence: Why did the valuation increase 10% when the market is slowing down?

County Appraiser Marion Johnson: We use historical sales in the valuation process and based on those sales that occurred in 2004 and 2005 we did not see a decline in value. In fact so far in the first two months of 2006 we have seen property values continue to increase at a very comparable rate. The market has slowed somewhat in the fact that it may take a little longer to sell a property but the prices that properties are selling for are not declining based on the data we are still looking at.

Bob, Lawrence: In last weekend’s paper, a Lawrence real estate firm indicated that Lawrence had over a years supply of new houses for sale and that anyone selling their personal residences should expect zero appreciation in value. If this is the case, why does your office keep inflating residential real estate values at 6 to 7% per year?

County Appraiser Marion Johnson: As noted in the previous question, the sales data we used from 2004 and 2005 did not indicate a drop in values or even a leveling out. If that should occurred in the market place in 2006 then that would be reflected in the 2007 values.

Terry, Lawrence: Why are the property values on the east side of town (near K-10) going up so much faster then they are over north of Sixth Street. Same house types and neighborhood types. Is the reason related to the problems with sewers that have lately been in the news? In other words, do real estate agents know something about the neighborhoods not generally known by the public?

County Appraiser Marion Johnson: The properties in the eastern part of the City of Lawrence have increased at a greater percentage in recent years than other parts of the city. The main factor in my opinion is the fact that new housing stock in the city has increased dramatically and many first time home buyers cannot afford to purchase a new house. What this has done has created a demand for the older housing stock in the eastern part of the city. As the demand for housing stock in this area has increased so have the prices that people are willing to pay for the houses in that area. As the sale prices go up then we in turn have to raise the values to keep up with the market.

Rich, Ottawa: What do you tell people who claim that the skyrocketing appraisal values are merely a veiled tax increase, especially when the market value of many homes is far below their appraised value?

County Appraiser Marion Johnson: Valuations and taxes are two separate things. What my office does is establish market value of property. It is true that these numbers are then used in the process to establish mill rates which in turn lead to tax dollars. However, values are not increased just to raise more taxes. As I noted in earlier questions the values established by county appraisal offices merely reflects the housing market in the community. As for the statement that many homes are appraised more than they are worth in the market each year the State Department of Revenue does a study of each county’s values compared to the actual sale prices of properties to determine how close we come to market value. In Douglas County for the past 14 years our ratio has been between 95 to 97 percent for residential property which means that are values are about 97 percent on the average of what property sells for.

Joe, Sarasota Fl.: I will be buying a home in Lawrence in the near future for about 250K, could you tell me what the taxes would be as it may be a influence to buying, we have a homestead act here in Fl. so our takes stay pretty much the same every year

County Appraiser Marion Johnson: If you pay $250,000 for the property it will probably be valued pretty close to that amount. To calculate your taxes take the value (250,000) times .115 (11.5 %) to get the assessed valuation. Then multiply the assessed valuation by the mill levy in the City of Lawrence which is around 104 mills (.104) this year to determine your taxes.

James Gunn, Lawrence: The appraisal form offers sales prices and dates for houses sold nearby, and then lists adjusted appraised values, sometimes as much as $100,000 more for houses sold just last year. What does this mean?

County Appraiser Marion Johnson: The adjusted sale price represents the value the comparable property would have sold for if it had all the same physical characteristics of the subject property.

L., Lawrence: Why are our property taxes raised every year? Why not, every two, three or five years?

County Appraiser Marion Johnson: By state statutes the county has to revalue property every year.

Jan, Lawrence: Are valuations determined from “list price” on area homes or “sales price”? They are, after all, two entirely different beasts!

County Appraiser Marion Johnson: The valuations are determine by the sale price. We do track list prices in my office but the sale price is what is used to determine values.

Darren from Lawrence: If my home was appraised by an independent appraisal company to refinance a second mortgage and the valuation came in lower than the county’s assessed valuation could the independent valuation be used as evidence that the county over valued my property?

County Appraiser Marion Johnson: Yes it can. You would need to file an appeal with my office and then bring the independent appraisal when you have your informal hearing. We will look at that the appraisal and if it is representative of market value then we could use that to reduce your value.

Peter, Lawrence: Why would you use rental income as an appraisal value to a property? How difficult is it to compare a property (duplex) to another property? It seems that rental income provides the city an advantage to appraise the property higher.

County Appraiser Marion Johnson: For residential properties that are rented we can use rental income to calculate market value. This method is not used all that often but it is mainly used to support the value determined by the use of comparable sales. In our comparable sales program we try to compare a duplex property to other duplexes that have sold. If we don’t have any duplex sales in a neighborhood then we might have to use single family homes which does make it a little more difficult to arrive at a fair market value.

Stevenson/Lawrence: Since both Baldwin and Eudora are seeing immense growth, why have their taxes not inflated as fast or much as Lawrence? Noted, most had only a $3,000 increase, while here in L. it was more like $10,000

County Appraiser Marion Johnson: As noted earlier both Eudora and Baldwin were valued using the same appraisal methodology as the City of Lawrence. The values in both of those communities increased on the average at the same rate as the City of Lawrence.

Mary, Lawrence: I live in West Lawrence, my house and the house next door are almost identical in size, construction and age, yet mine was appraised $20,000.00 higher and even her house is appraised at more than it could be sold for. How can you explain the difference in appraisals?

County Appraiser Marion Johnson: In fact if the houses are identical then you are right your house should not be appraised $20,000 more. What we find when people come into check on this type of situation is that the houses are not identical in every aspect. What I would suggest is that you come by the office and let us look at your property’s characteristics and your neighbor’s house to see if their any differences. If they are the same properties then I would suggest you appeal your value.

Doug, Lawrence, Ks.: At what point do we tax ourselves out of the ability to pay taxes? Since Kansas went to the annual appraisal basis for setting values, our taxes have seen significant increases. What also concerns me is when the city/county make their budgets, they sometimes congratulate themselves on not raising the mill levy but the property owner still pays more taxes since the valuations are higher.

County Appraiser Marion Johnson: You are right. If your value goes up and the mill levy stays the same then your tax bill is higher.

Lawrence: What percentage of the property valuation in the county are corrected after a taxpayers file an appeal?

County Appraiser Marion Johnson: In past years about 50 percent of the people who appeal each year received a value reduction.

Mary, Lawrence, KS: How are the evaluations figured? I just figured the square footage of my house and the neighbors’ to the North and to the South of me. We all have wood frame houses, about the same age. Theirs are $30.00 (1 1/2 story, 3 BR house) and $47.00 (1 story, 1 BR house) per square foot, while my house is $95.00 (1 story, 1 BR house) per square foot–none of use have paved driveways or garages–None have had ANY improvements made in several years. So why the BIG difference in the appraisals?

County Appraiser Marion Johnson: We used comparable sales to value most of the residential properties. The price per square foot can vary dramatically for a variety of reasons based on the different physical characteristics of houses.

Gene, Lawrence: My home and my next door neighbor’s home were built by the same builder in the same year. The floor plans, construction materials, lot size and finished square footage are similar. Yet, my home appraised at $45,000 more than my neighbor’s home. In fact, my home value increased 4% while my neighbors home value increased 2%. How can two similar homes located next door to each other have such differing values?

County Appraiser Marion Johnson: Since I don’t have the files on your property and your neighbor’s property with me today I really can’t answer that question today. I would urge you to stop by the office and let us go over the process with you. Again, if we have made a mistake you can appeal the value and we can then get the value corrected,

Kathy Lawrence: I am wondering about the appraised value of some homes. I have a small two bedroom slab home in East Lawrence which has had no improvements in a very long time. Yet my property tax was raised 25% just this year. It has gone up a total of 50% since 2003. That seems a little extreme to me. With a County average of 10.8% what do you think?

County Appraiser Marion Johnson: As noted earlier homes in the eastern part of the City of Lawrence have increased in value more rapidly in recent years than other parts of the city. The main reason is because it is the area that is most affordable for first time home buyers. This has led to increase demand which has led to higher selling prices in the eastern part of the city. The higher selling prices in turn lead to increasing the values established by the appraiser’s office.

Henrietta, Lawrence: Why are realtors selling houses for LESS than what the county appraises the properties for? With Lawrence housing at a 12% increase and interest rates due to increase over the coming year, what do you see affecting home sales the most – the valuations or the interest rates, and why?

Also, what is the easiest way to protest the county over valuating a property?

County Appraiser Marion Johnson: The easiest way to protest your value is to fill out the form on the back of the valuation notice and mail it into the appraiser’s office. We will then schedule you an informal hearing with a member of my staff. At the hearing you will need to bring some documentation to support what you think the value of your property is.

Karen, Lawrence: I understand you use similar properties that sold in the past year to evaluate the appraisal of homes, however, do you take into account location? Currently, my land value is more than double any other lot on my street (size is similar). How could my land be worth more than my neighbors?

County Appraiser Marion Johnson: We do take into consideration location. Your land value should be double your neighbors if it is similar in size and in the same location. However, keep in mind that we will look at the total value of your property. If that total value represents market value we may not make a value reduction because a difference in land value.

Leda: Hello Mr. Johnson,

Thank you for taking my question!

I am interested in learning the ratio of “appraised value” versus replacement value.

We own a 1968 ranch style home that will be “bumped” out using, obviously, new building materials.

How will you appraise the new and the existing structure?

Would you tell us square foot costs of “bumping out” from the current footprint of our house in what will be living room and bedroom space?

Will you tell us square foot cost of building from the ground up a “breezeway”.

Would you kindly tell us the square foot cost of building a two story garage, the second story of which would be a game room?



County Appraiser Marion Johnson: We would appraise a new and existing home the same way. Typically for residential properties we would use the comparable sales approach and the cost approach. As for your other questions you will need to stop by the office and visit with one of our appraisers.

Moderator: That will be our last question for the day.

I’d like to thank Marion for taking so many questions and for our readers for participating in today’s chat.

County Appraiser Marion Johnson: I would like to thank everyone who asked questions today. Anyone else who has questions about their appraisal should call the phone number listed on the change of value notice or they can call 785-832-5133.