New Zillow service triggers a tax alarm

Thursday, September 21, 2006

New Zillow service triggers a tax alarm
Aid to valuations -- and assessors?

By JOHN COOK
P-I REPORTER

Zillow.com hopes that homeowners will help improve the valuations on its site by voluntarily offering details about their homes that are not found in county property records.

Some homeowners, however, expressed concerns that those facts could lead to deeper analysis by tax assessors, a fear that King County Assessor Scott Noble said is not completely unfounded.

"In today's market, most people wisely don't let the assessor inside if they come knocking," said David Ruble, 45, a principal at Olympic Consulting Group.

"Posting home-improvement information on Zillow would effectively let the assessor in your front door to discover such goodies like granite countertops, premium appliances, marble baths and other improvements."

That could lead to a higher tax bill, he said.

Noble said that the county does not use "forecasting" or "trending" in determining its values. Rather, he said the county uses a historical three-year rolling average that takes into consideration factors such as the age, square footage and quality of the home.

"We don't utilize Zillow in our valuations," he said. "Ours is more of a historical exercise than a forecasting mechanism."

Nevertheless, Noble said the new Zillow service could be used as a tool to make sure that homeowners are paying their "fair share."

"If the particular individual is doing a major remodel off the books, sure we will utilize every tool to pick up those changes because it is only fair to spread the burden among all," he said.

He added that the assessor's office would have to verify the information listed on Zillow, most likely through a site visit.

Zillow spokesman Amy Bohutinsky said the company had not received any feedback from customers who were reluctant to participate in the new service for fear of higher tax bills.

The heavily funded company introduced a service Tuesday that allows homeowners to input the number of bedrooms, bathrooms or other home information into Zillow.

She stressed that Zillow is not a government entity and does not "have any connection with the tax assessor's office."

However, Bill High -- a licensed appraiser in the state -- says Zillow may be crossing the line between collecting housing information and providing an appraisal.

"One of the problems facing appraisers is the position taken by the (Appraisal) Institute and the state that merely giving an opinion of value, even 'off the cuff' and to a friend, constitutes the making of an appraisal and requires compliance with the relevant state laws and Institute regulations," High said.

"Zillow, meanwhile, does the same thing, using the same tools and techniques, but takes no responsibility for the accuracy of its work nor the havoc their mistakes might create."

In his view, Zillow should be held to the same standards as appraisers who are liable for their estimates.

P-I reporter John Cook can be reached at 206-448-8075 or johncook@seattlepi.com.

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