Entitled lawyer didn't do due diligence on home purchase

Discussion in 'Philadelphia Real Estate' started by billy ross, Jun 3, 2016.

  1. Big Irish

    Big Irish Well-Known Member

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    This is why the whole abatement system needs to be re-examined. They paid over a half million dollars for their house ($540k) and they were paying just $714 a year in property tax. And I love how these articles use percentages instead of real numbers. My taxes went up a bazillion percent! Because if they actually told you the cash number there would be no sympathy. Well here it is - they're being billed $1865.

    And I couldn't agree with Boognish more. The attitude of the people in these articles, could they be any more nauseating? At least she didn't say here abatement was "assassinated" like the last guy did. That's going to be hard to top.

    And another thing - I'm sure when their special little snowflake approached school age they would have refrained from criticizing the state of the public schools, because after all how good can they be when the owners of half million dollar homes are paying $446 a year toward their funding? I'm sure they would have looked in the mirror and said "We're part of the problem".
     
    #31 Big Irish, Aug 5, 2016
    Last edited: Aug 5, 2016
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  2. billy ross

    billy ross Well-Known Member

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    I've always viewed the abatement as a long walk on a short pier, so I can't be sympathetic to any of these people. It just doesn't make sense to pay a significant premium for something that will go away. Personally I'd rather buy at a discount knowing that the discount will evaporate. That's more my speed.

    My first home cost me $25k and the house we're in now cost $410k, and this one is a classic NW Philly Wissahickon schist single on a double lot. Things like that don't depreciate. If I were that couple and I wanted to move downtown from the NE, I'd have bought an unabated property in that area for less than half the price.

    I made my peace long ago with living with a little obsolescence, and I've long looked on people who insist on having the latest doodad, whatever that is, as people doomed to remain perpetually broke. Most likely they're screaming like they are because between their car and house and other payments, there's zero room in their budgets for unexpected expenses. Since that can't possibly be their fault, then of course they lash out at the city.
     
    #32 billy ross, Aug 5, 2016
    Last edited: Aug 5, 2016
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  3. ShoshTrvls

    ShoshTrvls Well-Known Member

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    Really, could you be any more condescending toward someone who would like to buy a home with modern conveniences? I'm not in love with this couple any more than you are, but just because you choose to live in an unremideled home in the northeast doesn't mean everyone does, or than people who buy such homes are living on a financial cliff that they will tumble over at any minute.
     
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  4. fiveomar

    fiveomar Well-Known Member

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    We bought a tax-abated home after 6 years of owning a non-abated home in the same rehabilitating neighborhood. Having certain features in a newer home is not a "doodad" ...for example, a roof deck which is much more prevalent in newer construction than in older houses. To me, if budget allows, a roof deck is a "must-have" given limited outdoor space in the city. Or having an open concept layout- not a doodad. We could have renovated our older home but it made MUCH more financial and practical sense (I say this as a CPA) to buy another home that already had everything we wanted.

    I don't think your generalization is accurate- I don't think the owners of newer abated homes are stretched thin (especially compared to the average Philadelphian homeowner)- if anything they are likely to be more financially secure, and for those that moved in from outside Philadelphia, their new (to the city) wage tax revenue more than offsets the abatement value.

    To each his own as far as architectural/home preferences; I tend to prefer historic exteriors but more modern interiors and home features.
     
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  5. hkp

    hkp Señor Member

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    The city doubled my property assessment one year after buying my house. And when they did that, they borked my second year and tried charging me $8,000. I paid almost that much in lawyers fees to get them to fix it - and it turns out, only happened because some guy who was pushing my papers for the updated land assessment with the city checked the wrong box on a form by mistake. Seriously. They threatened to put me up on sheriff's sale if I didn't pay $7,000 extra that was just, in the end, a typo on their side. So they lowered it to where it should be, forgave any interest, then in their letter say I have to pay within a week or they take the house/send another subpoena. No acknowledgment of their mistake and I would never have gotten my money back had I paid it and not lawyered up.

    This city is incredibly shady. You hear about deadbeats going decades without paying any taxes but they seem to make a habit of crapping on new home owners.


    Edit: Need to add that I have zero problem with their reassessing my land, at all. I bought a new construction and the builder apparently messed up and didn't alert the city that a house was completed on that land until a full year after I moved in. As far as the city was concerned, I was living in a run-down garage that was built behind an empty lot used as a landfill. But, they goofed with a very small clerical error, wouldn't give me the time of day, and went nuclear on me forcing me to get a lawyer, spend thousands ... and zero accountability and same shiiiiiit attitude insinuating I'm a deadbeat.
     
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  6. hkp

    hkp Señor Member

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    On top of that ... I bought an abated property (as mentioned above) but I budget myself for the saved money now. 50% goes to retirement, 50% goes to spending. It's not like we bought these properties with the intention of selling as soon as the abatement ends. It's thousands of dollars over how ever many years in savings, not a huge amount of unaffordable taxes in the future.
     
  7. ShoshTrvls

    ShoshTrvls Well-Known Member

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    I hope you are all sitting down, so that you can fall off your seat, as I just did.

    I filed a first level review on with regard to my taxes, and it was denied.
    I filed an appeal and have a hearing date in March.

    A short time ago, I received a call (and a confirming email) from a Real Property Evaluator from the Office Of Property Assessment who said that I was right, they were wrong, and they are increasing my abatement amount back to what it was before they shifted the land value. No need to show up at the hearing.
     
  8. phillyaggie

    phillyaggie Well-Known Member

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    ho-ly sheeeit!

    I missed the deadline to file my appeal.

    Can I still file for when the next year's tax bill rolls around?

    My land value went up almost 10x... crazy!
     
  9. phillyaggie

    phillyaggie Well-Known Member

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    congrats...small victories against this shitty hall.
     
  10. phillyaggie

    phillyaggie Well-Known Member

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    The problem I have, as do others like the couple that everyone is dogging here, is that this city isn't truly doing a land value reassessment. How can land values differ by tens of thousands of dollars on the same damn block, with same zoning and same quality of life indicators available to all the lots on the block?

    The folks with abated properties are indeed getting the bait-and-switch deal from this city.
     
  11. billy ross

    billy ross Well-Known Member

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    The city IS DOING a land value reassessment. It's only recent that land in Philly had any real value. The computers are clearly showing that land values have skyrocketed but that the assessments are behind the times. So a much-needed reassessment is occurring. This is as it should be - when assessments don't match market sales then assessments need to be fixed. Surely you aren't suggesting that valuing a lot near the Italian Market at $7,500 is reasonable? I think that'd probably be low for even nasty parts of SW Philly. It's ludicrous for this whiny couple.

    When assessments are badly out of whack you don't get to say that the fix is imperfect and so would be morally incorrect to implement. The test is whether it is fairer than what it replaces. Do not let the great be the enemy of the good. I see fools say it all of the time: 'This will only fix 10% of the problem so it isn't worth doing'. Don't they see how moronic that attitude is? If you continually fix 10% or 80% of the problem you eventually get most of the problems fixed. Every school in Philly that gets fixed means there is one less bad school in Philly and is thus a victory, even if there are many other bad schools that still need fixing. The same thing goes for the tax assessment system.
     
    #41 billy ross, Feb 9, 2017
    Last edited: Feb 9, 2017
  12. phillyaggie

    phillyaggie Well-Known Member

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    I DO NOT mind that reassessed values more closely reflect the market value for the land-- and in my case, over valued the land by more than 25k.

    If my house's land went from being taxed at $7500 to $75,000 in one fell swoop, then I would expect my next door neighbor's land to also get revalued to around $75,000 because we had almost identical lots of land; in fact the entire block full of around 30 houses should all be reassessed the land value portion of their real estate tax to around 10x what they were valued until last year.

    But that's not how this reassessment has happened. Neighbors on my block have their land values reassessed as much as $90,000 to as little as $10,000. There are at least couple of abandoned properties that both need a gut rehab job-- meaning, the only real value in them is the land they sit on; both are on the market for not $10,000, and not even $90,000, but more closer to $200,000. So, why is the city not reassessing these lots/abandoned houses at the equally high figure as the land underneath the few houses that are newly built?

    My guess: they know the new owners are schmucks and will pay up; the old owners often are the old-style Philly types who will keep voting for the same democratic machine, so why offend them? Why tax abando-slums out of existence only to be replaced by new residents who may not approve of old style politics? On my block itself, one guy owns 3 houses in his name-- two are semi-abandoned and falling apart, and he hasn't paid a red cent in property tax on them; the third one is halfway decent and he rents it out at a good chunk of change, and since its a rental property he has taxes in order for that house. he himself lives in another neighborhood and for that house he hasn't paid taxes in 20 years, and he owns a couple other properties in that neighborhood as well, for which too he is in arrears.

    Guys like him are the ones keeping the Philly schools from being funded adequately. Why shouldn't the city assess proper land value taxes on his properties? Land value doesn't change within a few hundred feet on the same block, by orders of magnitude! Why shouldn't the city and the sheriff's office go after these guys, especially in the newly gentrifying areas that are supporting much higher land values? Instead, the city is doing exactly the opposite. It is babying these slumlords, and putting breaks on private development and higher land values by dumping subsidized housing in precisely these same few gentrifying areas, all in the name of maintaining diversity.

    I DO mind when the reassessment is steep for only the land underneath new or rehabbed houses. Land is land, the "improvement" above it has NO bearing on the value of that land, unless it's zoned differently. Identical lots on a single block zoned for single-family residential must typically mean nearly identical land values, and NOT values that differ by tens of thousands of dollars. That's not how land values work. And more importantly, such a formula puts unequal burden of the tax on similar land lots and thus would not pass the uniformity clause of the the PA constitution.
     
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  13. billy ross

    billy ross Well-Known Member

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    Please look up the meaning of the phrase 'false equivalency'. Vacant land isn't the same as land with a shell on it. If shells are selling for $200k and lots are selling for $100k, the the shell minus the land is worth $100k. Arguments which say that things the market values differently should be looked upon as being the same are BS arguments, and that's what you argued above. There was an auction this past week. A lot near me sold for $2,600 - I'm pissed I didn't know about it. A shell with structural issues around the corner sold for $22,500. I didn't like that deal. That's almost a factor of 10. Shells aren't vacant lots.
     
  14. phillyaggie

    phillyaggie Well-Known Member

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    Vacant lots in point breeze are going for north of $80,000.

    You can't sideline an entire argument here.

    Philly is doing land value assessments completely wrong by basing the value of the land as a fraction of what sits on top of it.

    Let me know if you agree that is wrong. That's all.
     
  15. Tartan69

    Tartan69 Pawn in game of life

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    I think you're conflating things here. The gist of phillyaggie's argument is that the taxation value for a plot of land should not take into account the value of what sits on top of it. The "what sits on top" aspect is taxed separately as the improvement value. The *SUM* of those two amounts is what you are arguing should be different (and I don't think anyone would disagree with you there).
     
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  16. billy ross

    billy ross Well-Known Member

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    If shells sell for $200k and lots sell for $90k then clearly the edifice is worth $110k. Certainly when lots are sold at arms length, that gives you comps for the value of lots. But there is a rough formula to arrive at lot values. I think the lot is typically worth about 20% of the finished product after development. So it can be imputed, but that's rough.

    My point is that it's foolish to act like a vacant lot and a lot with a shell on it are essentially the same. They're not. The market tends to value them dramatically differently. And blocks are different - sometimes things even change mid-block. So using a pure sales comparison approach is itself fraught. Some lots are better situated than others, and that would dictate a Delta in values. Property appraisal is a nuanced, inexact science. Philadelphia probably has the best, fairest, most accurate assessment system in the entire region. Oftentimes (on my properties with a deep reservoir of comparables) my properties are assessed within a few thousand dollars of their true market values. I'm impressed at what the city pulled off, especially in comparison with the bogus numbers that we had before. Just because you can criticize something by teasing out its imperfections doesn't mean it's not a tour de force and a model within its industry.
     
    #46 billy ross, Feb 26, 2017
    Last edited: Feb 26, 2017
  17. ShoshTrvls

    ShoshTrvls Well-Known Member

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    Billy, your analysis makes no sense. The value of land is not dependent upon the structure, as PhillyAggie cogently explains (and, btw, clearly the BRT agrees with us and not you, otherwise they would not have caved on my assessment." Further proof of this is the fact that a building can actually reduce the value of the property, if the building is unusable. o A "shell" that can't be saved has to be torn down; that costs money, and the cost of that will work to REDUCE the sale price. (That is, an empty lot is woth $100,000; a lot with a building that needs to be torn down at a cost of $5,000 will sell for $95,000, less than the value of the clean lot).
     
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  18. billy ross

    billy ross Well-Known Member

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    Generally in poorer areas parcels without structures on them sell for less than parcels with derelict structures on them. Whether the existing structure is a liability or an asset depends very much upon the wealth of the area. Which is called Location in real estate. But using Aggie's numbers, when empty lots sell for $90k and shells on identical parcels sell for $200k, then the value of the derelict structure is $110k. I'm not vouching for his numbers and I guess it's possible that I misinterpreted his math. But I quoted it twice already and it seemed pretty clear to me. Why don't you quote me and show me the fault in my logic?

    And in some areas perfectly usable buildings get torn down just to get to the land underneath them. Atlantic City and North Broad were massacred due to this phenomenon. The former home of the Please Touch Museum was shamefully torn down, also for this very reason. You seem to believe that the only way a structure can be an impediment to value is if it's derelict. That is wholeheartedly not true. In Roxborough very many very nice buildings have gone away of late to unlock the land underneath them so throwaway junk can get built. I just hope this phonomemon doesn't spread to East Falls or Germantown. It would make me sick.
     
    #48 billy ross, Feb 27, 2017
    Last edited: Feb 27, 2017
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  19. phillyaggie

    phillyaggie Well-Known Member

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    I gave a list price for a shell on my block; it's been on the market for 2 years-- nobody is biting, in the hottest market to date in my 'hood.
     
  20. billy ross

    billy ross Well-Known Member

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    It doesn't matter what people ask for a place. Closed sales in arm's length transactions of places that have been properly exposed to the market are what constitute comps. Plenty of people enjoy listing places and not selling them.
     
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  21. Jayfar

    Jayfar I'm very old®

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    Kensington homeowner proves you can fight Philadelphia city hall over assessment | Philly.com

    Rokai Chen is among the thousands of Philadelphia property owners who were shocked in 2016 to learn that their taxes were going up even though they had a 10-year tax abatement.

    The city changed the allocation of the total market values between the land and the building or other improvements citywide, claiming that it was making the assessed values of the land more accurate. In Chen’s case, the city increased the taxable land assessment to $113,150 from $16,300 and said he could not contest that, only the total market value.

    Chen, 29, fought back and last month scored a rare victory in the Philadelphia Court of Common Pleas when a judge set his land value at $79,000 for 2017, 30 percent less than the city’s value. Chen, who represented himself, says he believes he is the first to get a favorable court decision in a case involving the 2016 land-only reassessments of 15,000 abated properties.


    [snip]​
     
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  22. fiveomar

    fiveomar Well-Known Member

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    Absolute unacceptable BS that the assessment appeals process "does not allow" you to contest the land value portion of the assessment rather than the total assessment.
     
    #52 fiveomar, Mar 1, 2018
    Last edited: Mar 1, 2018

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