NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — For those whose residential valuation has gone up in recent years, it's about how much your neighbors were able to get for their places when they sold, much more so than any improvements you made or didn't make.
"It's all about the local sales market," said Reno County Appraiser Michael Plank. "We don't care what things are selling for in Johnson County or in Sedgwick County or in Sherman County. Reno County's our jurisdiction, so that's the sales we are looking at."
The relevant statute is Kansas Statute 79-503a. Below is how it defines fair market value.
"Fair market value" means the amount in terms of money that a well informed buyer is justified in paying and a well informed seller is justified in accepting for property in an open and competitive market, assuming that the parties are acting without undue compulsion. In the determination of fair market value of any real property which is subject to any special assessment, such value shall not be determined by adding the present value of the special assessment to the sales price. For the purposes of this definition it will be assumed that consummation of a sale occurs as of January 1.
Sales in and of themselves shall not be the sole criteria of fair market value but shall be used in connection with cost, income and other factors including but not by way of exclusion:
(a) The proper classification of lands and improvements;
(b) the size thereof;
(c) the effect of location on value;
(d) depreciation, including physical deterioration or functional, economic or social obsolescence;
(e) cost of reproduction of improvements;
(f) productivity taking into account all restrictions imposed by the state or federal government and local governing bodies, including, but not limited to, restrictions on property rented or leased to low income individuals and families as authorized by section 42 of the federal internal revenue code of 1986, as amended;
(g) earning capacity as indicated by lease price, by capitalization of net income or by absorption or sell-out period;
(h) rental or reasonable rental values or rental values restricted by the state or federal government or local governing bodies, including, but not limited to, restrictions on property rented or leased to low income individuals and families, as authorized by section 42 of the federal internal revenue code of 1986, as amended;
(i) sale value on open market with due allowance to abnormal inflationary factors influencing such values;
(j) restrictions or requirements imposed upon the use of real estate by the state or federal government or local governing bodies, including zoning and planning boards or commissions, and including, but not limited to, restrictions or requirements imposed upon the use of real estate rented or leased to low income individuals and families, as authorized by section 42 of the federal internal revenue code of 1986, as amended; and
(k) comparison with values of other property of known or recognized value. The assessment-sales ratio study shall not be used as an appraisal for appraisal purposes.
The appraisal process utilized in the valuation of all real and tangible personal property for ad valorem tax purposes shall conform to generally accepted appraisal procedures and standards which are consistent with the definition of fair market value unless otherwise specified by law.
"We're looking at sales on an annual basis, and we're adjusting values accordingly," Plank said. "Things that sold for $45,000 three years ago are now selling for $60,000. That's being reflected in the values of the homes that don't sell, but that's the way we have to do it."
Since Reno County uses the last three years of sales data in its comparison sales approach, it's important to note that from 2020-22 the percent change in sales prices across the county has been up just over 12%.
"We're getting a lot of appeals along the lines of, well, I haven't done anything to my property, but you've adjusted it $10,000, or whatever the case is," Plank said. "You don't have to make changes to the property for the valuation to change. The upward market forces over the last several years, supply, demand, interest rates, inflation, all those things that go into...some of those are more local than others. We, obviously can't control inflation here in Reno County, but the local supply and demand market has just been very low supply, very high demand the last several years. With the historically low interest rates, that affected the sales prices of homes. Those upward market forces have been strong enough over the last several years to overcome, significantly overcome any downward pressure, such as depreciation."
You can appeal the decision of the appraiser on your value, but you need to make those appeals soon. The way to start the process is to give Plank's office a call at (620) 694-2915.
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