John, this has troubled me as well. The norm is to take the average price when you talk to the appraiser. However, does he have the right to change the rules when the average is less because of a short or a  foreclosure. The test may come shortly when the first law suit is filed. However, I think that the masses will prevail on this one since the rules are in black and white but subject to interpetation.

For example, if it said the average value, one could argue that the average value is not on a distressed property. However, those effected would say that all sales count. If they evaluate the worth of your property based on recent sales and don't exclude shorts or foreclosures than why should the tax man. It will be interesting how the courts rule.

Foreclosures are driving sales prices down, down, down. In some neighborhoods, if foreclosure comps are not used, there will be no comps. Many have disputed their tax bills because of prices going down, and depending on the area, are winning. This is going to become a major problem when counties aren't receiving their tax revenue. But I don't think the public is going to stand for property taxes continuing to go up.

It is my opinion that appraisers should use all comps to get market value. As far as taxes, towns should adjust their assessed values accordingly. The towns would then have to raised their tax rate to get the money needed to run town government and supply services.

John, when I do a BPO for a bank they want me to exclude any REOs. If I use one they want to know that it is an REO and why I feel I must use it.

Now, if a bank pays me $50 - $100 for a BPO; How much should I charge for compiling the data for a property owner so he can reduce his taxes?

And, if enough people file for a re-assessment on their property taxes; the township will just increase the rate and blame it all on school teachers.

Which tail are we going to chase?

Greg has a point.  If it is the principle of just lowering your assessment to prove a point, note that the taxable rate will increase to cover the loss of revenues due to lowering prices.  One can ask if exceptions could be created but that's opening up a big jar of worms!  

Don't think that every local county governing board across this country isn't looking at this issue under a telescope because that's what it needs.  There are pros and cons but then it comes down to money and to make sure that nobody was discriminated against.  

Good post.  Thought provoking!

John,  Idaho, where I live is a non-disclosure state; so foreclosures, traditional sales, concerning tax assessment by the County assessor are not really taken into account.  They use a different formula based on a cost/replacement.  The assessors values tend to be 10% to 20% below the actual market value.

They only assess property every 5 years in our state, 1/5 of the county each and every year, and the value is set at that time.

Sales values have increased every year since 1987.  But taxes have gone up and down, largely up.

Standard appraisels for purchases (or refinances) are done buy other people than the county appraiser, here in Idaho.

We also pay our taxes in arrears.(we pay for last year)