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Thursday, September 21, 2006

Update Zillow—Pay More Taxes?

With the crazy run-up in home prices of the last few years, homeowners (as a collective whole) have become somewhat two-faced when it comes to the value of their homes. On the one hand, they proudly tout how much value the granite countertops and other home upgrades have added to their home. They nestle all snug in their beds, while visions of Zestimates dance in their heads. Conversely, when the latest tax assessment arrives in the mail, they are shocked, shocked I tell you, that their tax bill has gone up so high. Now, thanks to Zillow, those two worlds may be on a collision course:

Zillow.com hopes that homeowners will help improve the valuations on its site by voluntarily offering details about their homes that are not found in county property records.

Some homeowners, however, expressed concerns that those facts could lead to deeper analysis by tax assessors, a fear that King County Assessor Scott Noble said is not completely unfounded.

"In today's market, most people wisely don't let the assessor inside if they come knocking," said David Ruble, 45, a principal at Olympic Consulting Group.

"Posting home-improvement information on Zillow would effectively let the assessor in your front door to discover such goodies like granite countertops, premium appliances, marble baths and other improvements."

That could lead to a higher tax bill, he said.
How delicious. The homeowner updates Zillow's information, gets a new, higher Zestimate for their home, and then later receives a higher tax bill as well. Of course, on the way down I imagine that Zestimates will fall a lot more quickly than tax assessments, but that's neither here nor there, really...

The end of the article had a bit of information that I thought was interesting:
However, Bill High — a licensed appraiser in the state — says Zillow may be crossing the line between collecting housing information and providing an appraisal.

"One of the problems facing appraisers is the position taken by the (Appraisal) Institute and the state that merely giving an opinion of value, even 'off the cuff' and to a friend, constitutes the making of an appraisal and requires compliance with the relevant state laws and Institute regulations," High said.

"Zillow, meanwhile, does the same thing, using the same tools and techniques, but takes no responsibility for the accuracy of its work nor the havoc their mistakes might create."

In his view, Zillow should be held to the same standards as appraisers who are liable for their estimates.
Is it just me, or is something is really screwed up with our laws when offering an off the cuff opinion of value legally constitutes an appraisal? Shouldn't the standard be a bit higher than that? If that's how low the requirements are for a legal appraisal, it's no wonder the cash-out re-fi train has been chugging along so fast.

(John Cook, Seattle P-I, 09.21.2006)

6 comments:

Anonymous said...

Zillow doesn't have any way to authenticate the owners identity.

New prank: update people's homes in Zillow and tax them into the red!

meshugy said...

New prank: update people's homes in Zillow and tax them into the red!

Excpet that initiave 747 caps taxes at a 1% year increase.

Anonymous said...

Was I-747 reinstated? Last I heard it was invalidated.

I-747 voided by court

SourMash said...

Bring em on! I made some changes last night to my entry. The Zestimate for my house went down when I added a bedroom and an additional 1/4 bath, and updated the number of rooms (which isn't in the county record). I didn't make the changes public.

I think I read a comment from a Zillow employee about this once; they said houses of a certain size with too many bedrooms are considered a negative, because the total square footage is considered to be overly divided.

Whatever. When I saw that their "validation" that I was the owner consisted of me picking my own name off a list of my neighbors, I realized this whole thing will be totally abused. It will be pulled within 3 months.

Anonymous said...

Love that prank Richard. Very timely too, with Halloween just around the corner.

christiangustafson said...

Dave Ruble, I thought you were a software jock, what are you doing commenting on this? Don't get mixed up with the sordid REIC! Or did the P.I. ask your opinion at a bus stop?

Enjoyed your OOA/OOD class at my old dotcom ("Request for Goat", etc).

Don't get involved with REALTOR®s, run, run away!