RONALD REED,	)
	)
Complainant,	)
	)
v.	)		Appeal Number 03-57006
	)
BILL OVERSCHMIDT, ASSESSOR,	)
FRANKLIN COUNTY, MISSOURI,	)
	)
Respondent.	)

Decision of the Franklin County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED, true value in money for the subject property for tax years 2003 and 2004 set at $84,150, assessed value of $15,903.

Complainant appeared pro se.

Respondent appeared by Counsel, Mark Vincent, County Counselor.

Case heard and decided by Hearing Officer, W. B. Tichenor.

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2003.

Complainant appeals the decision of the Franklin County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $84,150 (assessed value of $15,903, as residential - $82,930, and agricultural graded - $1,220 property). Complainant proposed a value of $76,000 for the residential portion of the subject. Respondent offered evidence in support of the valuation sustained by the Board. A hearing was conducted on November 13, 2004, at the Franklin County North Annex Building, Union, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant testified in his own behalf. The Exhibit A was received into evidence on behalf of Complainant. The exhibit consisted of the following pages:

Exhibit A1    Statement relating to issues Complainant raised in the appeal.

Exhibit A2    Closing statement on the purchase of Complainant=s manufactured home.

Exhibit A3    Proposal for construction of the subject basement foundation.

Exhibit A4    Proposal for the drilling of the well on the subject property.

Exhibit A5    11 photographs on 6 pages showing homes that adjoin the subject or are in the subject=s neighborhood.

Exhibit A6    5 photographs on 3 pages showing either comparables used by the Assessor in originally valuing the subject or homes that are in the neighborhood of such comparables.

Complainant gave his opinion of value for the residence and the one-acre homesite to be $76,000. This opinion of value was based on the actual cost which he had in the property, that is the cost for the land and the cost for all the various improvements made to the land, i.e. manufactured home, well, septic system.

Respondent placed into evidence the testimony of Mr. Donald D. Dodd, appraiser for Franklin County. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Dodd was received into evidence. Mr. Dodd arrived at an opinion of value for the subject residence and a one acre homesite of $84,000 based upon a sales comparison approach to value. In performing his sales comparison analysis, the appraiser relied upon the sales of three properties which he deemed to be comparable to the subject property. Mr. Dodd also performed a cost approach which provided an indicated value of $84,440.

1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Franklin County Board of Equalization.

2. The subject property is located at 5392 Chapel Hill Road, in a rural unincorporated area of Franklin County. The property is identified by locator number 34-1-02.1-0-001-019.100. The property consists of 9.1 acres, of which 8.10 are classified as agricultural land, and are therefore agricultural graded and valued at $1,220. The remaining one acre is the residential homesite and is improved by a one-story, vinyl-sided manufactured single-family structure of average quality construction. The house was manufactured in or around 1999, and appears to be in average condition. This dwelling has a gable-style shingled roof, a total of seven rooms, which includes two bedrooms, two baths, and contains 2,052 square feet of living area. There is a full basement, which has no finished living area. Exhibit 1.

3. There was no evidence of new construction and improvement from January 1, 2003, to January 1, 2004.

4. Complainant=s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the fair market value of the subject homesite and home to be $76,000, as of January 1, 2003.

5. The properties relied upon by Respondent=s appraiser in performing his appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within 5 to 12 miles of the subject, in rural unincorporated areas of Franklin County. Each sale property sold at a time relevant to the tax date of January 1, 2003. The sale properties were comparable to the subject in style, quality of construction, condition, room count, bedrooms and baths, living area, location and other amenities. Exhibit 1.

6. The comparables were described as follows:

Comparable 1 (1460 Forest Haven - 12 miles from the subject) sold in August, 2001 for $94,900. This property consists of a 5.76 acres tract in a non-urban area of Franklin County. It is improved by a manufactured ranch-style home of average quality and condition. It was built in 1997 and is vinyl-sided with a gable-styled shingled roof. The residence has a total of eight rooms, which includes four bedrooms, two and a half baths and contains 2,052 square feet of living area. There is a basement with no finished living area. Exhibit 1.

Comparable 2 (118 Green Acre Lane - 7 miles from the subject) sold in March, 2002 for $106,000. This property consists of a 6.13 acres tract in a non-urban area of Franklin County. It is improved by a manufactured ranch-style home of average quality and condition. It was built in 1994 and is vinyl-sided with a gable-styled shingled roof. The residence has a total of five rooms, which includes three bedrooms, two full and two half baths and contains 1,809 square feet of living area. There is a basement with no finished living area. Exhibit 1.

Comparable 3 (2016 Virginia Mines Road - 5 miles from the subject) sold in May, 2002 for $89,000. This property consists of a 4.35 acres tract in a non-urban area of Franklin County. It is improved by a manufactured ranch-style home of average quality and condition. It was built in 2000 and is vinyl-sided with a gable-styled shingled roof. The residence has a total of five rooms, which includes two bedrooms, two baths and contains 1,296 square feet of living area. The home has an unfinished basement. Exhibit 1.

7. The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable. The adjustments made appear to be appropriate and in accordance with generally accepted appraisal standards.

8. The net adjustments for Comparable 1 amounted to -$11,000 or 11.6% of the sales price. The net adjustments for Comparable 2 amounted to -$13,800 or 13% of the sales price. The net adjustments for Comparable 3 amounted to -$16,600 or 18.6% of the sales price.

9. The adjusted sales prices for the comparables calculated to $83,900, $92,200 and $72,400, respectively. The appraiser concluded on a $84,000 value which calculated to a value per square foot of $40.93 compared with the sales prices per square foot of living area for the comparables of $44.25, $58.60 and $68.67.

10. Respondent did not advocate an increase in the value of the subject property over that determined by Respondent=s mass appraisal methodology. Respondent=s evidence was substantial and persuasive to support the value of the residential portion of the subject property, as of January 1, 2003, to be $82,930, as originally determined by the Assessor and sustained by the Board.

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.4, RSMo.

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).

The presumption in favor of the Board is not evidence. A presumption simply accepts something as true without any substantial proof to the contrary. In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor (which is not presumed to be correct), is accepted as true only until and so long as there is no substantial evidence to the contrary.

There is no presumption that the assessor=s valuation is correct. Section 138.431.3, RSMo.

Section 137.115, RSMo 1994, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children=s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993). It is the fair market value of the subject property on the valuation date. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).

Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition is the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated.

2. Both parties are well informed and well advised, and each acting in what they consider their own best interests.

3. A reasonable time is allowed for exposure in the open market.

4. Payment is made in cash or its equivalent.

5. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

6. The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.

Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary; Exhibit 1.

In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property. The Hearing Officer=s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Section 138.430.2, RSMo.

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert=s testimony and accept it in part or reject it in part. St. Louis County v. Boatmen=s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence. Section 490.065, RSMo; Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).

In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2003. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002).

The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970). The owner=s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation. Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).

Missouri courts have approved the comparable sales or market approach, the cost approach (replacement or construction) and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm=n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

Complainant offered his opinion of value to be $76,000. This was based on Complainant=s assertion that $76,000 was more than he had in the property as cost of land and all improvements. Complainant testified the value of $76,000 was the amount which had been placed on the property by the Assessor for the 2001-02 assessment cycle.

Complainant also testified as to the other homes that are in close proximity to the subject and asserted that the surrounding homes were generally inferior to his home and thus the value of his property was reduced. Complainant further raised the issue of Respondent=s comparables being on or located close to paved county roads, whereas the subject is located on a gravel county road. Complainant also asserted that some other homes in the general neighborhood of some of Respondent=s comparables were better homes than those in the subject=s neighborhood.

No evidence based upon a recognized methodology for the appraisal of real property was presented by Complainant. The cost of land plus improvements does not necessarily establish the fair market value of the property. This is especially true when the land has been purchased and the improvements have been made some time prior to the date of valuation. In the present case the land was purchased and the improvements made in 1999, or approximately 3 to 4 years prior to tax date. Although this provides some basis for valuation, it is not conclusive. The

valuing to be determined is what a willing buyer and seller would have agreed to as a sale price on January 1, 2003, not what it cost Complainant 3 or 4 years prior to that date.

Complainant=s opinion of value is not based upon proper elements or a proper foundation. Therefore, that opinion has no probative value.

Respondent=s evidence was based upon two recognized approaches to value, the cost and sales comparison approaches. The issues raised by Complainant relating to the location of the subject on a gravel road and the general nature of the subject neighborhood are not sufficient to rebut any of the conclusions or assumptions made by Mr. Dodd in his appraisal. The fact that Mr. Dodd had to utilize sales from 5 to 12 miles distance from the subject and which were located on paved versus gravel roads, does not render his opinion of value unpersuasive.

The Hearing Officer recognizes that in a perfect appraisal world, the appraiser would have a number of sales to draw form which are all in the subject=s neighborhood and on the subject=s street or road. However, we do not live in a perfect appraisal world. Appraisers must work with the best comparable sale properties which they have in any given case. There is no evidence of any other sales of properties which have manufactured homes as the residence, which were better properties for comparison in this appraisal problem.

Mr. Dodd in his narrative addressed the fact of the distance from the subject. In his testimony he provided his opinion that he could find no market data upon which he could base an adjustment for the subject being on a gravel road and the comparables be on or near a paved road. Absence some market data on the issue of gravel versus paved road and the impact on value such a variance might have, any adjustment would be raw speculation.

As to a difference between the subject neighborhood and the neighborhoods of the Dodd comparables, here again there is no real difference that was demonstrated from market data which would provide a basis for a locational adjustment to the comparables. Without some market data to provide a basis for a locational adjustment for this alleged factor, an appraiser would be exercising nothing by conjecture to make such an adjustment.

The raising of questions on such factors as the gravel road and subject neighborhood issues by the Complainant are not evidence upon which the Hearing Officer can ignore Respondent=s appraisal report. Simply put, raising the question, without evidence to support the position inferred by the question raised, will not in most instances create a basis for rejecting the expert=s opinion. In other words, simply establishing that some factor might, could or may impact on value is a very far reach from establishing that in fact it has an impact on value. It is a further reach still, without specific evidence, to establish exactly how much such a factor would impact value. Specifically, in the present case, there is no evidence to establish that an adjustment of a minus $8,000 ($84,000 - $8,000 = $76,000) is warranted to the Dodd opinion of value, which would support Complainant=s opinion of value.

The valuation sustained by the Board is affirmed. True value in money for the subject property, residential and agricultural property combined, as of January 1, 2003, is set at $84,150.

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Franklin County for the subject tax day is AFFIRMED.

The assessed value for the subject property for tax years 2003 and 2004 is set at $15,903.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision. The application shall contain specific grounds upon which it is claimed the decision is erroneous. Failure to state specific facts or law upon which the appeal is based will result in summary denial. Section 138.432, RSMo 1994.

If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of Franklin County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED December 10, 2003.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Hearing Officer