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Throughout most of the state, the boom conditions in the real estate market ended in 2005 – in some cases rather abruptly. According to figures from the Department of Revenue, Wisconsin home values rose an average of 10 percent in 2005. DOR figures are not yet available for 2006, but the popular consensus is that home prices have leveled off (or at least slowed in the rate of increase).

The impact of this market change can be felt in many areas for homeowners – including the area of property assessments and the property tax bill. Tax bills for 2006 arrived in December and many homeowners have expressed concern, if not frustration – particularly if they are also in the process of trying to sell their property. Why? Because their tax bill is based on an assessed value that appears to be many thousands of dollars higher than the market is willing to pay.

How does this happen? First of all, we must remember that the 2006 property tax is based on the assessed value of that property as of January 1, 2006 – the very end of the housing price escalation. Unfortunately, there is no correcting the 2006 assessments.

Local assessors are busy establishing the assessed values for 2007. So what do we do now if we believe an assessment is too high? By law, property owners have an opportunity to challenge their current year assessment if they do so in a timely manner.

Notice of Change in Assessed Value

An official notice of any increase in the assessed value must be mailed to the property owner at least 15 days prior to the local Board of Review meeting (or Board of Assessors, if applicable). The notice must contain the amount of the change in the assessed value along with the date, time and location of the Board of Review meeting. In addition, the notice must set forth the procedures available to the property owner to object to the assessment. Typically these notices are mailed in April or May, but please note – failure to receive the notice does not invalidate the assessment. Therefore, if there is concern about an assessed value, it may be prudent to check with the municipal clerk’s office as to the anticipated date of the mailing of notices and the date of the Board of Review meeting.

Assessment Roll Open Book Sessions

If possible, the property owner should always try to meet with the assessor to discuss any questions about the assessment. By law, the local unit of government must publish or post a notice at least 15 days in advance of when the tax rolls will be open for inspection. This process is a less formal alternative – especially given that the assessors are present for at least two hours while assessment roll is open. Minor errors and misunderstandings may be easily corrected. It may be a good idea to contact the municipal clerk to verify the dates of the open book sessions and determine the times the assessors will be available.

48 Hours!

If the property owner decides to appeal the assessment to the Board of Review, the property owner must file a notice of intent to challenge the assessment with the Board’s clerk at least 48 hours in advance of the Board of Review’s first meeting.

Filing the Assessment Objection Form

The next step in the process is the filing of the objection to property assessment form, again with the clerk of the Board of Review, no later than during the first two hours of the Board’s first scheduled meeting. The form itself is available from the local municipal clerk’s office. It is always best to reconfirm with the municipal clerk the date, time and location of the first Board of Review meeting, as this may have changed to a later date than designated on the original notice of assessment change.

Board of Review

The Board’s first meeting will be at least two hours long. Assessment roll and other assessment data will be available during the meeting for examination by property owners. It is imperative that the property owner (or the property owner’s representative) appears at this meeting in order to preserve any subsequent rights of appeal.

The Board will schedule all objections that have been received prior to or during the first two hours of the meeting for a subsequent hearing. A minimum of 48 hours prior notice of the hearing must be provided to the property owner and the assessor (unless the parties mutually agree to waive the notice requirement).

The Board of Review is made up of municipal officials, local residents or a combination thereof, as established by the local ordinance. By state law, the Board must include at least one member who is the municipality’s chief executive officer (or his or her designee). This person(s) must have attended DOR training within two years prior to the Board’s first session.

The Board operates similar to a court of law – receiving sworn oral testimony supported by appropriate documentation. For example, if the property owner has an appraisal that he would like to introduce into evidence, it will be necessary for the appraiser to attend the hearing and provide testimony about the appraisal. In Milwaukee and other cities that have a Board of Assessors, the process is a bit different. The property owner must first go through an informal review by the Board of Assessors (composed of members of the assessor’s staff) before objecting to the Board of Review.

Removal of Board Members

In order to preserve the due process rights of the parties, a property owner filing an objection to the assessment may request that any one Board member be removed during the hearing on the assessment – for any reason whatsoever. Further, the property owner may request the removal of additional Board members for cause. All requests must be filed at the time the 48-hour notice of intent to challenge the property assessment is filed. Lastly, the municipality must also remove any Board members having a conflict of interest in the particular objection coming before them.

Appeal of the Board’s Decision

A property owner has the right of appeal if he or she does not agree with the decision of the Board of Review. There are two avenues of appeal set forth in the statutes – one is to the circuit court and the other is to the Department of Revenue.

Conclusion

The Department of Revenue Web site (www.dor.state.wi.us/html/govpub.html) offers a number of helpful publications regarding property taxes and the assessment process that can be downloaded or ordered, including the “Guide for Property Owners” – an excellent booklet of questions and answers about property assessment and taxes in Wisconsin.

By March or April of this year, most assessors will set the 2007 assessed values to properties. This will provide a new opportunity for property owners to make certain their property values reflect accurate values in the post-boom real estate market conditions.

By: Kevin King and Debbi Conrad

Countrywide Financial Corp. has instructed its brokers to no longer offer zero-down mortgages as an option for borrowers, the Wall Street Journal reports.

That’s because such loans are among the biggest reasons for a recent and sharp increase in the level of delinquencies at U.S. home lenders.
Countrywide joins such other companies as General Electric Co.’s WMC Mortgage and Washington Mutual Inc. in requiring that loan applicants have at least a 5-percent stake in their homes.

Previously, “if you breathe and have a Social Security number . . . you were going to get a house,” notes Mark Cady of Market Street Mortgage in Houston. Now, lenders are demanding that applicants have higher credit scores and contribute a bigger down payment, among other requirements.

While the flow of money available to the subprime borrower community is likely to slow considerably as a result of this trend, observers note that lenders not subject to federal regulation will continue to offer higher-risk products such as 100-percent financing and interest-only loans.

Sources: Wall Street Journal, Houston Chronicle
Originally Published On: Realtor Magazine Online

Taking title to a home can seem like a boilerplate event during escrow, but it is very important. The prime question is how you take title.

Taking Title When You Buy

If you are a first time buyer, you are probably wondering what taking title refers to. It is not the act of accepting a piece of paper from the seller. Taking title refers to who is listed on the title and HOW they are listed. If you are not married and are buying the home alone, you can stop reading now because you simply take the title in your own name. If you are married or buying the property with another person, things get a bit complex.

Most buyers take title in these ways – joint tenancy, or tenants in common. Here is a closer look at each.

Joint tenancy is a popular method of taking title. Joint tenancy simply is a co-ownership situation where the purchasing parties are both listed on the title. The advantage of this form of ownership is each person on title has the right of survivorship, meaning that if one of the owners dies, title passes automatically to the surviving owner. Joint tenancy also offers tax benefits in the form of a stepped up basis. It is beyond the scope of this article, but the general idea is that the surviving owner gets to step up the cost of the home, which saves on capital gains taxes.

Tenants in common are essentially partnerships to own a property. They are generally disfavored because of tax issues.

So, which title should you choose when buying a home? There really is not one correct answer. You simply need to analyze your specific circumstances to make the best choice.

THE ASSESSMENT PROCESS

What is a revaluation?
A revaluation is a complete and thorough review of all assessments. During a revaluation all assessments are examined and adjustments are made where necessary to guarantee that all property is assessed at market value. This is done to assure that taxes are distributed equitably and uniformly. Wisconsin Law requires all municipalities to assess property at market value at least once every five years.

What is the assessor’s role?

The assessor is a State certified individual whose duties are to discover, list and place a value on all taxable real and personal property in the municipality, in a uniform manner. The assessor is not involved in the collection of property taxes.

How does the assessor value property?

Wisconsin Law requires that property assessments be based on fair market value. Estimating the market value of your property is a matter of determining the price a typical buyer would pay for it in its present condition. Some factors the assessor considers are: what similar properties are selling for, what it would cost to replace your property, the rent it may earn, and any other factors that affect value.
IT IS IMPORTANT TO REMEMBER THAT THE ASSESSOR DOES NOT CREATE THIS VALUE, BUT RATHER INTERPRETS WHAT IS HAPPENING IN THE MARKET PLACE.

What is Market value?

Market value is defined as the amount a typical, well-informed purchaser would be willing to pay for a property. The seller and buyer must be unrelated, the seller must be willing, but not under pressure to sell and the buyer must be willing, but not under any obligation to buy. The property must be on the market for a reasonable length of time, the payment must be in cash or its equivalent, and the financing must be typical for that type of property. If all of these conditions are present, this would be a market value, arm’s-length sale.

Can the assessment on my property be changed even if the assessor has not been inside my property?

To make a proper assessment on a building, it is desirable for the assessor to see the inside and outside of the property.
The law requires that the property be valued from actual view or the best information available. The assessor keeps records on the physical characteristics of each property in the municipality. Even though the assessor may have been unable to go through your property, the assessment will still be reviewed, based on the existing records and the sales of similar properties.

Will I be penalized if I don’t let the assessor in when an inspection is requested?

When an interior inspection is not allowed, the assessor will attempt to update the records by looking at the property from the outside and using any other available information. To ensure an accurate assessment, it is to your advantage to allow the assessor inside your property when an inspection is requested. By denying an inspection, you may lose the right to appeal your assessment to the Board of Review.

I have recently built a new home. Will the construction costs be considered?

Your construction cost is an historical figure which may or may not reflect the current market value of your property. It is only one element that will be considered.

What will happen to my assessment if I improve my property?

Generally speaking, improvements that increase the market value of a property will increase the assessed value. The following are typical items that will increase the assessed value or your property:
Added rooms or garages
Replacing older siding with aluminum or vinyl siding
Substantial modernization of kitchens or baths
Central air conditioning
Fireplaces
Extensive remodeling

Will my assessment go up if I repair my property?

Good maintenance will help retain the market value of your property. Generally, your assessment will not be increased for individual minor repairs such as those that follow; however, a combination of several of these items could result in an increased assessment.
Replacing concrete walks and driveways
Replacing gutters and downspouts
Replacing hot water heater
Repairing or replacing roof
Repairing porches and steps
Repairing original siding
Patching or repairing walls and ceilings
Exterior Painting
Replacing electrical fixtures
Replacing furnace
Exterior awnings and shutters
Exterior stripping, screens, storm windows, doors
Exterior landscaping including lawns, shrubbery, trees, flowers

How can my assessment change when I haven’t done anything to my property?

General economic conditions such as interest rates, inflation rates, supply and demand, and changes in tax laws, will influence the value of real estate. As property values change in the market place, those changes must be reflected on the assessment roll.

Do all assessments change at the same rate?

There are differences between individual properties and between neighborhoods. In one area the sales may indicate a substantial increase in value in a given year. In another neighborhood there may be no change in value, or even a decrease in property values. Different types of properties within the same Neighborhood may also show different value changes. For example, one-story houses may be in more demand than two-story houses, or vice-versa. Older homes in the same area may be rising in value more slowly than newer homes.
There are numerous factors to be considered in each property which will cause the values to differ. Some of the factors which can affect value are location, condition, size, quality, number of baths, basement finish, garages, and many others.

Will I be notified if there is a change in my assessment?

Wisconsin law requires that whenever an assessment is increased, the owner must be notified.

How do I know if my assessment is correct?

You should first attempt to decide for yourself what your property is worth. This can be done by looking at area sales, contacting appraisers, and comparing assessments of similar homes. Sales and assessment information is available in the Assessor’s office and the Real Property Lister Office which is open to the public for review during regular office hours.

THE APPEAL PROCESS

What if I don’t agree with my assessment?

Talk with the assessor. During this informal session you can learn how your assessment was made, what factors were considered, and what type of records are kept regarding your property.

After this review, if I still think the assessment is incorrect, what can I do?

You should arrange to appear at the Board of Review. The municipal clerk will provide you with an objection form that you must complete. You will then be scheduled for a hearing at the Board of Review.

What is the Board of Review?

The Board of Review is made up of either local officials or citizens appointed by the governing body. It is the Board’s duty to hear evidence by the taxpayer and the assessor and to decide if the assessment is correct.

What evidence do I need to present to the Board of Review?

State law puts the burden of proof on the property owner to show that the assessment is incorrect. Keep in mind that your evidence must be strong enough to prove that the assessor’s value is incorrect. Only relevant testimony given at the hearing will be considered by the Board. STATING THAT PROPERTY TAXES ARE TOO HIGH IS NOT RELEVANT TESTIMONY. You should establish in your own mind what you think your property is worth. The best evidence for this would be recent sales prices for properties similar to yours. The closer in proximity and similarity, the better the evidence. Another type of evidence is oral testimony from a witness who has made a recent appraisal of your property.

What happens after the Board of Review makes its decision?

The Board will either give or mail you a notice of its decision. If you do not agree with the Board’s determination, the notice will contain information on how you may appeal the Board’s decision.

How will my taxes change as a result of the new assessment?

Though the value of your property affects your share of taxes, the actual amount you pay is determined by the budget needs of the schools, city, county, sewer district, technical college, and state reforestation. All of these taxing units decide what services they will provide in the coming year and how much money they will need to provide those services. Once this decision is made, a tax rate is adopted that will generate the needed dollars.
Your property taxes are then determined by multiplying the tax rate by your assessment.

Assessed Value
————————– X Tax Rate = Taxes
1000

Although your tax payments are made to the Treasurer, a large share of your tax dollars are turned over to other governmental units such as the schools, county, sewer district and the state.

GLOSSARY

ASSESSED VALUE: An estimate of value assigned to taxable property by the assessor for purpose of taxation.

MARKET VALUE: The amount a typical, well-informed purchaser would be willing to pay for a property. For a sale to represent market value, the seller must be willing (but not under pressure) to sell, and the buyer must be willing (but not under any obligation) to buy. The property must be on the market for a reasonable length of time, the payment must be in cash or its equivalent, and the financing must be typical for that type of property.

REVALUATION: Placing new values on all taxable property for purposes of a new assessment.

TAX BASE: The total assessed value of all assessments in the municipality.

TAX LEVY: The total amount of property tax money that a taxing unit (such as the schools, city, county, etc.) needs to raise to provide services.

TAX RATE: The tax levy divided by the tax base. It is often expressed in terms of dollars per hundred or dollars per thousand. The tax rate is multiplied by the assessed value to determine the amount of tax that each property must pay.

DATES TO REMEMBER

January 1st————The assessment date - All property is asessed as it existed on this date.

March 1st ————Last day to file Personal Property returns.

Beginning the———-Board of Review meets. (Check with the clerk or assessor for exact dates.)
2nd Monday in May

January 31st———–Full payment of taxes due OR if paying in installments, due date of first tax installment payment.

Town of Addison

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Town of Barton

Donald Peters
4328 W. Heildel Road 121 N
Mequon, WI 53092
Telephone: 262.242.1608

Town of Erin

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Town of Farmington

Donald Peters
4328 W. Heildel Road 121 N
Mequon, WI 53092
Telephone: 262.242.1608

Town of Germantown

Layton S. Schultz
N47 W31143 Hill Street
P. O. Box 85
Hartland, WI 53029
262.367.5999

Town of Hartford

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Town of Jackson

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Town of Kewaskum

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Town of Polk

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Town of Richfield

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Town of Trenton

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Town of Wayne

Erma Franke
W4197 Ledge Road
Mayville, WI 53050
Telephone: 920.583.3320

Town of West Bend

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Village of Germantown

Suzanme Plutsclack, Value Solutions
Village Hall
P. O. Box 337
Germantown, WI 53022
Telephone: 262.250.4770

Village of Jackson

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Village of Kewaskum

Nathan Marks, Bowmar Appraisals
3005 W Brewster Drive
Appleton , WI 54911
Telephone: 920.733.5369

Village of Newburg

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

Village of Slinger

Michael Grota, Grota Appraisals
N88 W16573 Main Street
Menomonee Falls, WI 53051
Telephone: 262.253.1142
Fax: 262.253.4098

City of Hartford

Reid Terry, CLT Inc
City Hall
109 N Main Street
Hartford, WI 53027
Telephone: 262.673.8255

City of West Bend

Shannon Krause
City Hall
1115 S Main Street
West Bend, WI 53095
Telephone: 262.335.5125

Home equity loans can put you well into the black, financially speaking, provided you don’t use the lending strategy as a stepping stone to even more debt.

Home equity money is yours to use as you wish, but most home owners focus on several economic priorities when they cash in on home equity loans.

1. Transform many bills into one: Debt consolidation is by far how most home owners use home equity loans. It can also be the riskiest way to use the home equity loans.

If you’ve racked up bank credit card debt, retail credit debt and other debts, home equity loans can pay them all off leaving you with one monthly bill that’s likely smaller than the others combined. It’s also a good chance the interest rate will be half what you were paying on just one credit card. The rate on home equity loans is cheaper because, unlike credit cards, the debt is secured by your home. Additional debt-cost savings are available because with the consolidation you’ll likely pay off your debt sooner. Along the way you’ll get to deduct the interest, up to the legal limits allowed for home equity loans.

Aside from the savings of home equity loans, a single monthly bill can also improve your cash flow, leaving you with more disposable income to save or invest. And over time, the single monthly payment also improves your credit profile, revealing to lenders that you are a less risky borrower who isn’t over burdened by debt.

However, the need for home equity loans could indicate a credit habit the home equity fix might only exacerbate. Homeowners should consider how to prevent themselves from scoring more credit before securing home equity loans.

Don’t just pay off your old debts, cut up all but one card for emergencies and consider debt counseling to learn how to budget your income.

Be sure to write a letter to your creditors telling them to close your accounts so you can’t get at them and your credit report doesn’t show you’ve got unused credit you can still tap.

If there’s a difference between what you were paying each month on all your debts and the home equity loan’s payment, save it and learn to use cash where possible.

Do not take on additional debt while the home equity loan is still outstanding.

2. Put the home equity money back: Almost as common as debt consolidations are home equity loans used for home improvements. With carefully planned and professionally completed work, homeowners effectively put home equity loans back into the home by adding more square footage, by bringing the home up to current building codes and by upgrading to contemporary home design and features.

Problems here stem not so much from using home equity loans for home improvements, but the decisions you make about the improvements.

The best improvements from home equity loans increase the fair market value of your house. Remodeled rooms, notably kitchens and bathrooms, add the most value. Additions are fine too as long as you don’t over improve. Additions should blend in both with your home’s existing style and the design of the homes in your neighborhood. Interior painting, carpeting and the like probably won’t add much value, but those cosmetic touches will improve the scalability of your home.

Keep in mind, however, that lenders aware that your home is on the market may not give you an home equity loan, without additional costs. And if you have an equity loan when you sell your home you have to gross enough to pay off both the first mortgage and any outstanding home equity loans.

3. Invest home equity funds in your kids: Using home equity loans for education is another popular choice, what with the skyrocketing costs of post-secondary education and higher incomes that don’t qualify for special grants and government-backed loans.

Home equity loans used to pay for education are investments of sorts too. An educated son or daughter is more likely to be financially independent sooner and building his or her own wealth rather than draining yours.

Unfortunately, college for your kids comes just about that time when you are nearing retirement and may consider home equity loans to offset your reduced income. Don’t over look special educational loans, tax write offs and scholarships to meet your children’s educational needs.

4. Disposable goods and services: No matter what you do with your home equity money you can deduct the interest and that’s a compelling reason to use the home equity loans to buy those big-ticket items you’ve always wanted, a new car, boat, recreational vehicle. Home equity loans are also a godsend if you are hit with big medical bills or some other emergency.

Don’t forget, when the car is ready for a trade-in, the recreational vehicle is up on blocks and you are fit and healthy again, you may still have equity loan payments to make. Your home is on the line.

Fixed-Rate vs. Adjustable-Rate
By Motley Fool Staff

Fixed-rate and adjustable-rate mortgages are the two main types of mortgages of the home-lending world. Let’s take a look at the differences.
A fixed-rate mortgage is very straightforward. The borrower knows from the beginning what the interest rate will be for the entire duration of the mortgage, and the monthly payments due are likewise fixed. Simple.

Slightly less simple is the adjustable-rate mortgage, or ARM. It changes from year to year, to reflect the interest rate environment. If rates are plummeting, your rate will also drop — and vice versa. ARMs typically have an extra-low “teaser rate” for the first year, as well as an upper limit, or cap. The amount that an ARM can rise each year is also limited, so that it won’t rise too quickly.

Fixed-rate mortgages are good because they come with no surprises. But for this benefit, you’ll likely pay a slightly higher rate than you would with an ARM. Fixed-rate mortgages are good for people who enjoy stability. They’re also especially attractive during periods when interest rates are low, such as they have been in recent years. At such times, fixed-rate mortgages permit you to lock in low rates for many years to come.

Conversely, if the prevailing interest rates are very high and you think rates are more likely to fall than rise, an ARM might make more sense. In addition, since ARM rates are typically slightly lower than fixed rates, they permit people to borrow a little bit more, and the difference can help you buy a slightly spiffier house. ARMs are often recommended for those who will be in a house for only a few years, since the rate is not likely to change too much in that time. Beware, though — don’t enter into an ARM unless you’re sure you’ll be able to handle the worst-case scenario if your rate quickly rises to the cap.

If you’re looking to buy or sell a home, educate yourself before you get too far into the process. You can do so in Dan Burgeson’s Buyers and Sellers section.