So in the midst of all the county corruption scandals, I decided to buy a home on the near west side of Cleveland.  Soon after, I received a letter from the county that my property taxes were short a considerable amount.  It turns out, the market value of my home was inflated to much more than the home was purchased for and mortgage wasn't paying enough into escrow.

 

So now I've submitted my property tax challenge that is currently pending with hearing supposedly in October some time.  Does anyone have experience in challenging property tax?  Should I be expecting a refund check for any overages?

I challenged mine but I didn't have to go to a hearing. Bring your appraisal and ask your real estate agent for comps. The most important thing, assuming it was an arm's length transactiom, is that the market dictates the value - I.e. what you paid for it is what it is worth. I think I got a check back, but I don't remember for sure.

I informed my real estate agent, but was blown off.  Since I don't know exactly how to challenge the real estate company, I'm kind of left in the dust.

 

If mortgage was drawn up incorrectly, can blame be put on real estate agent / mortgage company?

Is the purchase price higher or lower than what the county has it appraised at? 

the purchase price is 52% lower than appraised value.

I gotcha.  The mortgage company should have drawn up you payments with what the taxes are currently, not based on the price you paid for the house.  Once you get taxes lowered, your mortgage payment would go down.  It sounds like they based them on what you paid for the house.  I doubt you have much recourse here - take it up with your mortgage broker, not the real estate agent.. 

Did you get your own appraisal when you purchased the property? That will go a long way in supporting your contention. If it goes to a hearing (many municipalities have you come in to state your case) don't be surprised if they're armed for bear. A couple of friends / co-workers went through the process and were surprised and how much info the council brought to the table to support their valuation.

Did you get your own appraisal when you purchased the property? That will go a long way in supporting your contention. If it goes to a hearing (many municipalities have you come in to state your case) don't be surprised if they're armed for bear. A couple of friends / co-workers went through the process and were surprised and how much info the council brought to the table to support their valuation.

 

I'm not sure, but I believe it is easier to argue for a reduction when you just bought the house - like I said, the purchase price should equal the value (in most normal cases).  It sounds like what happened is the mortgage company just messed up and didn't have his payments high enough.  Even if the county has it overvalued, the mortgage company needs to collect based on that high valuation because until and appeal, that is what is owed in taxes.

Yes, the mortgage company made an error that is now corrected.

 

I am currently challenging the taxable value on the property which is 52% more than purchase price.  I did not have my own appraisal, so hopefully market value equaling purchase price holds up. 

 

Thanks for replies...I'm mostly wondering how the challenge process works and If I'm entitled to refund check if challenge is accepted.

Yes, the mortgage company made an error that is now corrected.

 

I am currently challenging the taxable value on the property which is 52% more than purchase price.  I did not have my own appraisal, so hopefully market value equaling purchase price holds up. 

 

Thanks for replies...I'm mostly wondering how the challenge process works and If I'm entitled to refund check if challenge is accepted.

 

You've got a unique situation, and one I've not seen before. The closest example that I've seen is with a client who was incorrectly billed too high by the county (in this case Lake county) for its residential taxes, and the bank (who was the escrow agent) paid it, wiping out the clients checking account. Ultimately, the county reimbursed for the over-billed amount.

 

In your case, I'm guessing the market value is correct, based on comparable sales (or at least reasonable)? If that's the case I'm not sure they'll be swayed to apply the re-assessed value retroactively to the date of purchase. You certainly have merit to have the assessed amount reduced and subsequently your tax liability lowered on a go-forward basis

So the question becomes, how does Cuyahoga county calculate market value?  I was under the impression market value = last sale price. 

It's partially based on last sale price but you can't just use that otherwise you could play all sorts of financial games with real estate to cheat your way out of tax liability.  In other words an individual bargain does not make the market.  To prove market value you need a larger sample size of similar buildings and properties in similar or the same neighborhood that have been sold recently.  It's in the public interest that property values don't swing wildly and vary much parcel to parcel so there is resistance in the system to market forces.

c3vin as part of the process of obtaining a mortgage the mortgage company/lender had to order an appraisal. You have a legal right to a copy of that appraisal; in fact one of the original disclosures you signed informs you of that right. Within that appraisal there will be several comparable sales or "comps" as they're referred to in the business. Those comps are given adjusted values up or down from what they were actually sold;  depending on how they compare to your property. Those adjusted values are basically market value for your home. Use those values to determine if your tax valuation is to high. Just a little advice from someone in the business.

c3vin as part of the process of obtaining a mortgage the mortgage company/lender had to order an appraisal. You have a legal right to a copy of that appraisal; in fact one of the original disclosures you signed informs you of that right. Within that appraisal there will be several comparable sales or "comps" as they're referred to in the business. Those comps are given adjusted values up or down from what they were actually sold;  depending on how they compare to your property. Those adjusted values are basically market value for your home. Use those values to determine if your tax valuation is to high. Just a little advice from someone in the business.

 

Thank you, this is extremely helpful.