ValueAppeal Rolls Out National Services for Property Tax Appeals, Competing with EasyTaxFix and Others
Who wouldn’t want to lower their property taxes? That’s the question on the minds of the team over at ValueAppeal, a Seattle-based startup that helps online customers to quickly evaluate their current value of their real estate property, and to create a custom property tax appeal that could potentially save them money.
The company, founded in February 2009 by Charles Walsh, the former CEO of Bothell, WA-based data storage company ISSI Data, says it makes the expertise of a property tax attorney available to homeowners easily and conveniently through an online tool. Using Web 2.0 tools, ValueAppeal and rivals like LowerMyAssessment of Lynwood, WA, and San Diego-based EasyTaxFix, which Bruce profiled in 2008, are offering similar online service elsewhere across the country.
Walsh, a Seattle native, told me he got the idea for ValueAppeal in the fall of 2008, around the time he sold ISSI Data to data space competitor Media Recovery. He was looking for his next project. What he found was that, one in four homes in the United States are over-valued by local government assessors each year—and the process of appealing is tedious, to say the least.
“I had a background in real estate and I wanted to do something that combined my interest in real estate and the power of web 2.0 tools. A friend mentioned how difficult it was to appeal your property tax assessment so I looked into appealing my own assessment and discovered that the process is opaque, time-consuming, and intimidating,” Walsh told Xconomy via email. “I decided to change that, and ValueAppeal was born.”
The problem, Walsh says, is nothing new. It’s the solution that’s been hard to come by. Appealing a property assessment can seem complicated, and the process varies from county to county.
“Real estate values go up and down over time and many assessors do not adjust their assessed values quickly enough to match market values,” Walsh says. “So, many homeowners can become severely over-assessed rather quickly in any given year.”
ValueAppeal built a system to make the whole process easier. Here’s how it works: Interested homeowners can type their address into the database on ValueAppeal’s website, to see if their home has been over-assessed. The database compares it to the assessments for similar homes elsewhere in the county, to ensure accurate results. If the database determines that a home has been over-assessed, then ValueAppeal will file an appeal for a $99 fee. If your property tax isn’t lowered, the company says it will refund your money.
ValueAppeal spent 20 months building out its database to include counties nationwide—starting with areas like King County, San Mateo County, Riverside County, and most of Maryland. It’s services are now available to 80 percent of the nation, excluding “some rural areas across the country we don’t cover, and a few select urban areas that have oddball data issues,” Walsh says. And so far, the company says it has lowered its customers’ property tax bills by an average of $839.
Although the company would not comment on its financials, or how many customers it has served thus far, Walsh did note that the venture has attracted investor support. In January the company finalized a $1 million seed round from local angel investors, and brought in another $400,000 in equity financing in February.
ValueAppeal is hardly alone, however. Two years ago, EasyTaxFix jumped into the market, focusing on helping homeowners in San Diego County lower their property taxes. Since then the San Diego startup has expanded to regions that have high over-assessment rates (Seattle is not one of them), charging between $49 and $79, depending on the area. EasyTaxFix co-founder Adam Berkson says this model is working well for them so far, although he adds that the five-person company has decided not to expand into all 50 states nationwide.
“We have served over 7,000 customers,” Berkson told Xconomy via email, adding that the company has an average potential savings of $2,000, average realized savings of $1,000 for customers, and has had a 70 percent success rate with its appeals to date.
The company, which Berkson says was the first to offer do-it-yourself online property tax appeals services, has also recently filed a patent on a subscription-based property assessment monitoring service, and is planning to expand its service offerings soon.
Another rival, LowerMyAssessment offers similar services for calculating the home value, compiling a report, and filling out appeal forms. Their products range from $39.95 to $299.95. What makes ValueAppeal unique, according to Walsh, is the in-house database they operate. While EasyTaxFix calculates comparable properties sales data based on distance, square footage, and a number of other variables, Walsh says ValueAppeal’s approach includes points missed by competitors.
“We use multiple data points like number of bedrooms, bathrooms, lot size, construction quality and on and on, so our analysis is far more robust. That extra data we use in our calculations means we have stronger evidence and a stronger case when it comes to helping people appeal their property assessment,” Walsh says. “LowerMyAssessment doesn’t have an in-house database of property data, or their own valuation algorithm. Their business model involves waiting for a customer to enter an address on their homepage and then pinging a 3rd party vendor who sends back a completed valuation report which they just mark up and resell.”
So what’s coming up next for the property tax appeals market? ValueAppeal will be rolling out new services in September, and may have some forthcoming partnerships. EasyTaxFix says it has a few updates coming up as well.
“We are working on a next-generation product that will be much more comprehensive and expansive,” Berkson says. “I think ValueAppeal and EasyTaxFix are the two companies with the most traction.”