Unencumbered by the thought process!

Those of you who don't know - I am an appointed Tax Judge for Sacramento County.

Today, I had the honor of helping our Clerks enter the assessment appeal applications for the 2008-2009 tax year. I was shocked that we have 18 boxes filled with applications! It appears each box holds about 500 appeals... that means we have 9,000 appeals to log into the system. It took me about 5 minutes to log in a simple single family appeal and 20 minutes for a larger commercial appeal.

Just doing simple math would mean it will take over 120 business days or 24 weeks to get them all entered and ready to send to the assessor for review and then, if necessary, schedule a hearing.

At this pace - the next filing period will be here before all appeals will be logged!

The Home Valuation Code of Conduct will become effective May 1, 2009!

I believe this is the death-nail for independent fee-appraisers and will force all lenders to use an appraisal management company (AMC) to order appraisals.

While using an AMC may look like a solution to the Government... it's really just eliminating quality appraisers from the market. Let me explain in this example:

An AMC operates by taking a large percent of the appraisal fee to operate their business. Let's say that a bank "Bells Cargo" needs to order an appraisal - they contact the AMC they own to order the appraisal. The AMC they own will find the lowest priced appraiser who will work under their terms.

Using the tried and true concept of "You get what you pay for"... who would be the lowest bidding appraiser????

The problem will be reflected in the quality of the remaining appraisers.

Is you guess a home in Elk Grove - you would be correct. Four years ago the average price per square foot was $250.00 for a single family home in the zip code 95758. Today, that same home has a price per square foot of $135.00. Thats a loss of $115.00 per square foot.

Let's do the math:

1,000 square foot home x $250 = $250,000 (4 years ago)

1,000 square foot home x $135 = $135,000 (today)

Loss in value = $115,000 or $28,750 per year or $78 per day.

This week I had a couple of interesting appraisals of single family homes. One of the appraisals was for a home in Antelope that was purchased for $310,000 in October 2006... the homes was recently offered for sale for $106,000. I thought maybe the condition of the home has declined - but, when I looked at the listing and comments from the Realtor in 2006 - I realized the home was actually in better condition now! That means the home has declined just over $200,000 in 2 years or $100,000 a year.

Would you be shocked if I told you the cost to build the home was $150,000 not including the land? It appears the land is free if you buy this home!

We MUST be getting close to the bottom!!!!

What a great day! I received an e-mail from Mr. Peter S. Wong, the director of Hang Seng Hong Kong Bank. It appears that a family member had left me a VERY large sum of money... in fact, it is over $25,000,000!

Since I am a fair person - I am going to share this money with all everyone who reads my blog. Well... there is a catch - I need to send Mr. Peter S. Wong a check for $10,000 to get the money wired into my account. So - if you are interested in sharing a portion of the $25,000,000 - please let me know so you can pay your own share of the $10,000 to get the money wired.

Oh... and one more thing... I also ordered 12 ShamWows and some sort of pill that will "help" me out.

What a great day!