By Lauren Otis, Staff Writer
Curious and concerned residents of Princeton Township and Borough peppered representatives of the firm that will oversee next year’s property revaluation with questions about the process during a special presentation this week. Among the questions posed at the joint session of the Township Committee and Borough Council on Monday night were:
• How will the firm — Appraisal Systems Inc. — seek to put a value on unique residences with little sales history, buildings owned by Princeton University and other tax exempt organizations accounting for a large percentage of Princeton real estate?
• How will the current turbulence in the housing market be factored into the new valuations?
The last property revaluation in the township and borough occurred in 1996. The county Board of Taxation ordered the Princetons to conduct a revaluation that will commence in the spring of 2009, said Ernest Del Guercio Sr., chief executive officer of Appraisal Systems.
Factors in determining the need for a revaluation are the number of years since the last one and the current ratio of assessment to sales, Mr. Del Guercio Sr. said. A town where homes assessed at $200,000 sell for $400,000 has an assessment ratio of 50 percent, he said. Princeton Township’s current assessment ratio is 47.45 percent and Princeton Borough’s is 40.3 percent, Mr. Del Guercio Sr. said.
An internal and external inspection process of homes, recent individual sales, and an evaluation of neighborhood characteristics and market trends all were factored into final home evaluations, Appraisal Systems officials said.
”We take any and all information,” said Rick Del Guercio Jr., president of Appraisal Systems. “During the inspection process I would grab the inspector and give him an earful,” Mr. Del Guercio Jr. said.
”What I can tell you is this process will be entirely open. It will be as transparent as we can make it,” Mr. Del Guerci Sr. said, with residents having opportunities to contribute to, question and change their home valuation.
Following the presentation, borough resident Bob MacLennan asked how the appraisers evaluated houses in neighborhoods owned by the university and Princeton Theological Seminary, which are not on the tax rolls, never sell and for tax purposes have no value. “How do you determine that value?” Mr. McLennan said.
Borough and Township Tax Assessor Neil Snyder said sales information from adjoining privately-owned properties was used to help determine values for such properties. Following the meeting, Kristin Appelget, Princeton University director of community and regional affairs, said all university single-family housing is on the tax rolls, although she did not know the circumstances of seminary properties.
Township resident Kip Cherry asked how appraisal values were arrived at for unique properties and historical properties. She cited Nassau Hall as an example, noting it is a one-of-a-kind historical structure. “How would you appraise that?” Ms. Cherry said.
”We use a cost approach on very, very special properties that typically do not sell,” said Mr. Del Guerci Sr., referring to the method of determining an appraised value by determining the cost to replace the property.
Mr. Snyder said a citizens committee would be formed to provide input into all aspects of the revaluation, just as was done in the 1990s.
The revaluation process will commence with the inspection of properties, said Jason Cohen, vice president of Appraisal Systems. External and neighborhood evaluations are conducted by an inspector, without homeowner participation, unless they are needed to unlock gates or otherwise allow the inspector onto the property, he said.
Some negative external factors on properties are proximity to municipal facilities like water towers, to high tension wires, to commercial properties and location on streets with higher traffic flows, Mr. Cohen said.
After a letter is sent out to each property owner, an Appraisal Systems inspector will visit the home unannounced between 9 a.m. and 5 p.m. to conduct a five- to 15-minute long internal inspection. If the owner is not at home, notice will be left and an evening visit made, he said.
Heat and air conditioning, fireplaces, furnished basements and attics, and kitchen and bathroom renovations and condition are important aspects to the internal inspection, Mr. Cohen said. “The inspectors will look for the most important things if they were a buyer, what would they look for in a house,” he said.
Appraisal Systems seeks to visit 100 percent of properties for a valuation but will estimate the interior layout and features of a home if it cannot gain access, and leave the homeowner an “estimate card,” according to Mr. Cohen. The estimate errs by law on the high side, by assuming basements are finished, for instance, he said. Until the process is complete, Appraisal Systems will work with property owners to accommodate their special needs regarding the interior assessment, he said, but he noted “We can’t change information over the phone. We have to see it with our own eyes.”
The ultimate goal is to arrive at a value for every property as of the stipulated date of Oct. 1, 2009, said Mr. Del Guercio Jr. Property owners are notified of the value Appraisal Systems has arrived at and the means it has arrived at that value, and can then meet one-on-one with the company to discuss the valuation and any factors they want to present to change it, he said.
The next step is for the valuation to be submitted to the Mercer County Board of Taxation, Mr. Del Guercio said. At this point the valuation can still be challenged by the property owner but Appraisal Systems is then legally obligated to defend its valuation before the county tax board, he said