Assessors have submitted their values and will be sending assessments to property owners in the coming weeks, if they haven’t already. Some property owners may look at their values and wonder, “How can my property possibly be valued this high? Is the assessor out to get me?”

The good news is that assessors aren’t out to get you. As a whole, they genuinely want to find the right value. But that doesn’t mean your property was valued correctly. So how could they get it wrong?

Mass Appraisal Techniques Can Lead to Over-Assessments

There are far too many properties for assessors to inspect individually each year. They must therefore rely on mass appraisal techniques. These techniques are designed to value many properties based on certain, common characteristics. The values that are generated based on those common characteristics are then evaluated by statistical methods.

Single-family residential homes offer a good example for how mass appraisal techniques are used. The common characteristics that an assessor might use are the number of bedrooms, number of bathrooms, size of the home, and the home’s location. Using only these common characteristics, assessors arrive at an estimate of the property’s value to calculate property taxes. Because there are a lot of single-family residential homes, the greater volume of data allows for a stronger statistical analysis to arrive at the right value.

But what about the other characteristics of your property that aren’t included in the assessor’s model? Or what if your home has unique features? None of these are considered. In general, the more your property differs from the common characteristics used by the assessor, the further off the assessed value will be.

Commercial, Multi-Family, and Industrial Properties Are More Prone to Over-Assessments

When assessors apply mass appraisal techniques to other property types—such as commercial, multifamily, or industrial properties—there is a greater probability for over-assessments.

First, these property types are less uniform, so it becomes more difficult to identify a common set of characteristics that assessors can use to value them as a group. Second, there are fewer of these property types, particularly compared to single-family residential properties, so the statistical analysis is not as robust. With less reliable data, there is a greater chance for over-assessments.

An Imprecise Art and Inexact Science

Assessing the value of a piece of real estate is a subjective task. There is a popular saying: “Beauty is in the eye of the beholder.” So too is the value of a property.

A recent opinion from the Minnesota Tax Court observed that the appraisal of real estate is both an art and a science. It then quipped that appraisal is “at best an imprecise art” and an “inexact” science.

How to Challenge an Over-Assessed Property

So if appraising real estate is an imprecise art and inexact science, where does that leave the property taxpayer when faced with an assessed value based on mass appraisal techniques that feels too high?

Even though taxpayers will not know what common factors the assessors used for the mass appraisal techniques, they should focus on the individual characteristics of their property. Identify all the characteristics that impact value, and present the data to the assessor. This could include everything from the condition of the heating and cooling systems, conditions of the interior, or any other added features. Additionally, being able to compare your property to a similar property that recently sold can be persuasive. But because valuation is an imprecise art and inexact science, each property will be different.

Property taxpayers should watch their values closely each year, and March and April are the ideal times to do so. The deadline to file an appeal to challenge the taxes due in the current year is April 30. At the same time, assessors are sending valuation notices for the taxes payable the following year, and taxpayers have a small window of time to negotiate with assessors before budgets are finalized. You can see the full timeline for a property tax appeal here.

Although the assessors are not out to get you, there will always be outliers when mass appraisal techniques are used. Make sure you’re not an outlier paying too much in property taxes.