You know how there were some real estate agents that actually made their fortunes as a result of the last recession?
Have you been wondering how you could leverage the current situation to improve your real estate business rather than struggle to keep it afloat?
Would you be willing to reach out to your database with a new service offering if it meant:
Helping them save thousands on their homes
Generating tons of new leads from people that really need you now
You would stand out as the local agent that goes above and beyond
Of course, you would!
But if you’re like most real estate agents, you’re probably wondering how that could even be possible right now with the quarantine. Actually, it is because of the Corona Virus crisis that this new strategy will work so mind-blowingly well for you this year and during every future financial crisis. For those of you that live and work in high-level markets like New York, Seattle, and California, this stupid-simple strategy works even better.
Okay, so before you burst with excitement and curiosity, I might as well tell you that the new service that is about to reunite you with past clients, generate a new (cash-based) income stream for you, and flood you with new business is property tax appeals.
You’re going to walk away from this post much richer by knowing:
Exactly how to file property tax appeals using CMA’s to save people thousands
What you need to do to start making cash with this today
Why this is one of the most practical ways to recession-proof your real estate business
PLUS I am going to supply you with everything you need to get the word out about your new services and start profiting from it today. With everything I am sharing today, making money by filing property tax appeals can also be done by your real estate assistant, admin, or possibly even transaction coordinators.
I am going to go out on a limb and say that this is the most powerful, profitable and instantaneous solution that I have EVER given you guys out of thousands of articles, videos, and podcasts so please pay me back by sharing this article in your favorite real estate FB group.
What Are Property Tax Appeals?
As you already know, a property owner’s tax bill is determined by the County Assessor’s estimation of the property value. This is known as the “assessed value” of the property.
When the housing market begins to decline as it is in much of the country right now, there are far more opportunities for appeals because the property values decline resulting in an overwhelming number of homeowners that could save money with an appeal.
Since the government makes money by keeping property taxes high, they often over assess a property’s value to keep tax bills high. It is also common that submarkets get over-assessed as a result of proximity to an area where property values experience an incline. For example, if you live in a county where property values went up an average of 10%, but your submarket only saw a 5% increase, there will be tons of opportunities for appeals.
Basically, every time you find a property that has been assessed as having too high of a value and you file an appeal, the homeowner gets to save thousands of dollars and you get to make a portion of that amount. All you have to do is show that the property is not worth as much as the county claims it is.
How Do You File Property Tax Appeals?
One of the absolute coolest things about adding property tax appeals to your real estate business is that you already have the skills and knowledge needed for the process:
You know the local real estate market and economy
You have a list of homeowners at your disposal
You understand property value
You know how to negotiate and navigate contracts
You know how to run a CMA
The only thing you (might) not know is how to file the actual appeal system works but that’s no problem because I’m about to break it all down for you.
Obviously, the first thing you have to do is pick a property to assess. If you are a homeowner, you should start with your own to practice and maybe even save.
The first step is to run a comparative market analysis (CMA) on the property to use as evidence that the property has been overassessed. In most cases, you will be able to make your case for residential appeals over the phone or email quickly and easily using this evidence. However, in some rare cases, you will have to file a more formal appeal to a board or representative in person.
Keep in mind that it is important to be accurate and honest with these appeals. You can’t just cherry-pick the comps to try and drive down the value in your CMA because most officials will see through that and deny your appeal. As long as you are honest, experienced tax appeal professionals promise it is extremely, extremely rare your residential appeals will get denied or contentious.
Why Will People Hire You To Do This?
Obviously, the fact that you could save people hundreds or thousands of dollars at this crucial time is the biggest reason that they would want to hire you to do this. However, most homeowners either do not know that it is possible to lower their tax bill this way or do not want to go through all of the perceived hassles to go through the process. In fact, most people would assume that something like this requires the help of a seasoned professional a.k.a. You. Even if they knew that they could save money this way, most would struggle to find a firm willing to do their small residential appeal since the pros mostly focus on large commercial appeals and will actually refuse to give them service.
What Should You Charge For Property Tax Appeals?
We have established that this is a fast and easy way for you to save your clients thousands of dollars on their tax bills. The question is, how much money can you make by offering residential property tax appeals?
Based on what the major national professional firms that offer this service have done, you can adopt a few different pricing models. Choose the one that you believe will work best for your client base and sphere:
Flat Rate - I did the research and on average, the starting flat fee for this service is $350. Since that is the national average you shouldn’t be afraid of this price but feel free to adjust it as you see accordingly.
Hourly - In most cases, this process will be so quick and easy that it won’t be very profitable for you other than the business you drum up as a result. However, if you live in one of those rare areas where extra work will be required on your part, you may prefer this method.
Commission - If you prefer to charge your clients a commission on what you are able to save them, aim for the national average of 30-45%. This model works great in markets with a large discrepancy between the assessed value and value you establish.
Split - Another option you have is to combine these models to make one of your own that makes sense for your market. Many companies in the U.S. charge a $250 flat fee plus a 25-35% commission of whatever tax savings are generated.
On top of the money you make directly from filing residential property tax appeals, think about all of the real estate conversations you’re about to have with clients, referrals, and prospects as a result of offering this valuable service right now?! If you use all of the advice and super cool tools that I put into The Realtor’s Residential Property Appeal Service Success Kit below, you should be able to produce a minimum of 3 new real estate deals.
To better understand just how lucrative this is, let’s run the numbers on a VERY conservative basis to see how much money you stand to make on residential property tax appeals using the flat fee pricing method.
Let’s say you have a list of 500 homeowner contacts (a very low number for most agents). Now let’s say you reach out and get in touch with half of them. Of that 250 people, ten percent take you up on your offer and pay you $250 for your appeals service.
250 X 10% = 25 people
25 X $250 = $6,250 your revenue
As you can see, it is VERY feasible that you will make at least $6,000 just from appeals. That is before any real estate commissions you earn as a result.
How To Collect Payments From Clients
Since you already have a business license you won’t have to worry about that part. However, I know 99% of you have no professional and trusted way of collecting these payments no matter how you decide to set your pricing. I want to save you from not getting paid for your valuable time and services as I did for years by billing after the fact, only to have people ignore the bill. Therefore, I strongly urge you to sign up for an account with Square Payment Processing using this link which will give you at least $1,000 in free processing. Make sure you use Square to invoice and collect payments so people don’t stiff you like they did to me.
Marketing Your Residential Property Appeal Services
At this point, I should have your juices flowing with excitement over all the cash and closings you’re about to start raking in to make 2020 your best year yet. But, I know how you real estate agents are I know the easier I make this strategy for you to follow, the more successful you will be with it.
As I sat down to write this post, my motivation was to help all of you not just survive this crisis but have your strongest year ever to prove you’re here and not going anywhere. So in addition to giving you this valuable advice, I also want to supply you with a proven system and my professional copywriting so you can make money with residential appeals in an hour (or less) from reading this.
The biggest thing you need to do is get the word out there that you are now offering this service. However, if you really want people to take you up on this you need to be very tactful in how you market the service. Especially, while you are getting the hang of all of this.
Therefore, I put together a super-strategic kit I’m calling The Realtor’s Residential Property Appeal Service Success Kit. Inside this kit is everything you need to start promoting and actually performing residential property tax appeals including:
The spreadsheet you need to gather and organize the data for your properties and appeals
Phone scripts to use with clients & referrals to get appeals
Social media video posts for multiple platforms including Facebook, Instagram, LinkedIn, Twitter and also Pinterest.
Email and text campaigns to send your sphere to sell appeals
Phone and email scripts to send to the county for the actual appeal
Once you get your hands on The Realtor’s Residential Property Appeal Service Success Kit all of the hard work has already been done for you! Just open it, start filing the appeals, and collect your cash.