Statistical Statistical Revaluation Revaluation

ProjectProjectTown of Cumberland, RITown of Cumberland, RI

Effective 12/31/2007Effective 12/31/2007

Certified Revaluation Certified Revaluation CompanyCompany

Incorporated in 1998Incorporated in 1998 Since that time we have performed 25 Since that time we have performed 25

successful Revaluation Projects in RI.successful Revaluation Projects in RI. All of our clients are repeat customersAll of our clients are repeat customers

This is our 3This is our 3rdrd Revaluation project for the Revaluation project for the Town of Cumberland.Town of Cumberland.

This illustrates our ability to get the job This illustrates our ability to get the job done accurately and on time.done accurately and on time.

The Statistical Revaluation The Statistical Revaluation Process includes:Process includes:

Physical Inspection of recent salesPhysical Inspection of recent sales Physical Inspection of parcels with Physical Inspection of parcels with

open Building Permitsopen Building Permits Rebuilding of Cost, Market, and Rebuilding of Cost, Market, and

Income pricing tables (Market Models)Income pricing tables (Market Models) Application of Market Models to each Application of Market Models to each

property in Town.property in Town. Review of resulting valuationsReview of resulting valuations Perform Logical EditsPerform Logical Edits

Project TimeframeProject Timeframe

Preliminary Market Analysis – October 31, Preliminary Market Analysis – October 31, 20072007

Completion of Field Inspections – Jan. 31, Completion of Field Inspections – Jan. 31, 20082008

Preliminary Values to Assessor – Jan. 31, Preliminary Values to Assessor – Jan. 31, 20082008

Mail Valuation Notices - February 29, 2008Mail Valuation Notices - February 29, 2008 Informal Hearings – March 31, 2008Informal Hearings – March 31, 2008 Project Completion – April 1, 2008Project Completion – April 1, 2008

Market ConditionsMarket ConditionsMedian Sales PricesMedian Sales Prices

0

50000

100000

150000

200000

250000

300000

350000

1 Family Condo - Res Multi-Family

VacantLand

2004 Sales2005 Sales2006 Sales2007 To DateActive Listings

Market ConditionsMarket ConditionsNumber of SalesNumber of Sales

0

50

100

150

200

250

300

350

400

1 Family Condo -Res

Multi-Family

VacantLand

2004200520062007 (Projected)

Market ConditionsMarket ConditionsDays on MarketDays on Market

0

10

20

30

40

50

60

70

80

90

100

1 Family Condo - Res Multi-Family

2004200520062007 (To Date)Active Listings

Our Sales AnalysisOur Sales Analysis

Will be based on 2007 SalesWill be based on 2007 Sales Weighted for 4Weighted for 4thth quarter sales quarter sales Not based on percentage increase or Not based on percentage increase or

decreasedecrease Units of comparison developed from Units of comparison developed from

marketmarket Rate per square footRate per square foot Rate per unitRate per unit Rate per acreRate per acre

Income AnalysisIncome Analysis

For commercial properties ONLYFor commercial properties ONLY Income & Expense forms mailed to Income & Expense forms mailed to

income producing properties only.income producing properties only. Confidential Confidential Voluntary compliance in RI.Voluntary compliance in RI. Considered only when sufficient data is Considered only when sufficient data is

availableavailable No business income considered – Real No business income considered – Real

Estate Only Estate Only

Informal HearingsInformal Hearings

Data hosted on our website for property Data hosted on our website for property owners to view prior to meeting.owners to view prior to meeting.

Property Owner is asked to fill out a brief Property Owner is asked to fill out a brief formform

We will listen and consider property We will listen and consider property owner’s concernsowner’s concerns

We will document the issues raisedWe will document the issues raised We will perform additional researchWe will perform additional research We will look for pattern of complaintsWe will look for pattern of complaints We will make Corrections when neededWe will make Corrections when needed

Valuation ProcessValuation Process

Units of comparison are developed from Units of comparison are developed from the local real estate market (Model the local real estate market (Model Development)Development)

Models are tested against recent valid Models are tested against recent valid salessales

Results must conform to Industry Results must conform to Industry StandardsStandards Mainly developed by the IAAO Mainly developed by the IAAO

(International Association of Assessing (International Association of Assessing Officers)Officers)

Model ExampleModel Example

Step 1Step 1 Living Area Living Area x x Rate per square Rate per square

foot foot Adjustment for house styleAdjustment for house style Adjustment for sizeAdjustment for size Adjustment for number of storiesAdjustment for number of stories Adjustment for exterior wall typeAdjustment for exterior wall type Adjustment for cathedral areasAdjustment for cathedral areas

Model ExampleModel Example

Step 2Step 2 Basement adjustment for partial or no Basement adjustment for partial or no

basementbasement Adjust for finished basement (if any)Adjust for finished basement (if any)

Finished basement adjustment dependant Finished basement adjustment dependant on qualityon quality

Adjust for storage or expansion attic (if Adjust for storage or expansion attic (if any)any)

Model ExampleModel Example

Step 3Step 3 Adjust for heating typeAdjust for heating type Adjust for central air conditioning (if Adjust for central air conditioning (if

any)any)

Step 4Step 4 Adjust for number of bathroomsAdjust for number of bathrooms Adjust for additional plumbing fixturesAdjust for additional plumbing fixtures

Wet BarWet Bar In-law Kitchen, etc…In-law Kitchen, etc…

Model ExampleModel Example

Sep 5Sep 5 Adjust for Non Living Area SectionsAdjust for Non Living Area Sections

GaragesGarages PorchesPorches DecksDecks Any other section of a house that is not Any other section of a house that is not

living spaceliving space

Model ExampleModel Example

Step 6 - Adjust for building featuresStep 6 - Adjust for building features Basement garagesBasement garages FireplacesFireplaces Unfinished living areaUnfinished living area Unheated areaUnheated area Non cooled area (Only applies to central Non cooled area (Only applies to central

A/C)A/C) Adjustments may be positive or Adjustments may be positive or

negativenegative

Model ExampleModel Example

Step 7Step 7 Apply Desirability IndexApply Desirability Index

Quality of ConstructionQuality of Construction Market desirabilityMarket desirability Functionality of layout / designFunctionality of layout / design Conformance with surrounding propertiesConformance with surrounding properties Curb appealCurb appeal

Model ExampleModel Example

Step 8 Step 8 Apply Depreciation to reflectApply Depreciation to reflect

AgeAge ConditionCondition Wear & TearWear & Tear Functional issues (Example – Structural Functional issues (Example – Structural

Problems)Problems) Economic Issues (Negative impact from Economic Issues (Negative impact from

adjacent property)adjacent property)

Model ExampleModel Example

Step 9Step 9 Land ValuationLand Valuation

Units of measure form marketUnits of measure form market Home siteHome site

Flat rate based on location Flat rate based on location Adjustment applied when undersizedAdjustment applied when undersized

Additional buffer landAdditional buffer land Acre pricingAcre pricing No development potential reflectedNo development potential reflected

Model ExampleModel Example

Step 10Step 10 Value Site ImprovementsValue Site Improvements

Detached garagesDetached garages In ground PoolsIn ground Pools ShedsSheds Barns & other miscellaneous structuresBarns & other miscellaneous structures

Value is based on quality, size and age.Value is based on quality, size and age.

Logical EditsLogical Edits

After value After value generation logical generation logical edits are edits are performed to performed to identify potential identify potential errors. errors.

Examples:Examples:

Percentage IncreasePercentage Increase Percentage DecreasePercentage Decrease List of new parcelsList of new parcels List of deleted parcelsList of deleted parcels Vacant parcels with Vacant parcels with

improvement valuesimprovement values Changes in property Changes in property

ClassificationClassification

Important PointsImportant Points

Tax Revaluations do not raise Tax Revaluations do not raise additional revenue for the additional revenue for the municipalitymunicipality

New Tax Levy Cap in RI New Tax Levy Cap in RI predetermines amount of revenue predetermines amount of revenue that can be raised from taxation.that can be raised from taxation.

Main goal of the revaluation project Main goal of the revaluation project is to equitably distribute the tax is to equitably distribute the tax burden.burden.

Thank YouThank You

Questions?Questions?