STEVE STRADER,	)
	)
Complainant,	)
	)
v.	)		Appeal Number 03-53500
	)
PATTY MAXWELL, ASSESSOR,	)
DADE COUNTY, MISSOURI,	)
	)
Respondent.	)

Decision of the Dade County Board of Equalization sustaining the assessment made by the Assessor, SET ASIDE, Hearing Officer finds true value in money for the subject property for tax years 2003 and 2004 to be $185,000, assessed value of $35,150 for the residential property, and $26,700, assessed value of $3,200 for the agricultural property, for a total true value in money of $211,700, total assessed value of $38,350.

Complainant appeared pro se.

Respondent appeared pro se.

Case heard by Hearing Officer Aimee L. Smashey

Case 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, specifically, the fair market value of the residential portion of Complainant=s property, i.e. home site and house.

Complainant appeals the decision of the Dade County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $229,600 for residential property (assessed value of $43,620) and $26,700 for agricultural improvements and land (assessed value of $3,200). Complainant proposed a value of $200,000 in the Complaint for Review of Assessment. A hearing was conducted on November 10, 2003, at the Dade County Courthouse, Greenfield, Missouri.

Pursuant to Section 138.431.4, RSMo, this appeal has been transferred to Hearing Officer W. B. Tichenor for rendering of a decision. The decision reached by Hearing Officer Tichenor has been reviewed by Hearing Officer Smashey and she concurs in the Decision and Order entered herein.

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

Complainant presented the testimony of Glennis Lynn, Missouri State Certified Residential Real Estate Appraiser. Ms. Lynn performed an appraisal on the subject property and concluded a fair market value as of October 23, 2003, of $225,700. The valuation was for Complainant=s entire property. Ms. Lynn testified that the value would also be applicable for January 1, 2003.

Complainant testified in his own behalf. Complainant testified as to his opinion of value for the subject property being $200,000. This was calculated by allowing $100,000 for materials in his house, $50,000 for Complainant=s labor and another $50,000 for the land and agricultural buildings on the property.

The following exhibits were received into evidence in this appeal.

Exhibit A    Assessment data on a property in Greene County, Missouri.

Exhibit B    A newspaper article from the September 22, 2003, Springfield News- Leader on FEMA to redraw nation=s flood maps.

Exhibit C    Letter dated November 17, 2003 from Dade County Commissioners and Respondent to Hearing Officer Smashey; copy of letter dated June 17, 2003 to Complainant from Presiding Commissioner of Dade County; copy of July 14, 2003 Board of Equalization minutes and copy of Board decision letter. This Exhibit was received as part of the record on November 21, 2003 by Hearing Officer Smashey.

Exhibit AP4    Appraisal Report of Glennis Lynn.

Exhibit A1    Copy of undated letter from Respondent to Dade County Taxpayers.

Exhibit STC2    Copy of Property Record Card on the subject property, also included in AP4.

Exhibit SF3    Calculations as to measurements of the subject house made by Complainant.

Exhibit FR71-5    Copy of Settlement Statement.

Exhibit CR6    Copy of Check Register.

Exhibit HH8    Copy of statement for plumbing fixtures.

Exhibit HL9    Copy of statements from Herrman Building Materials.

Exhibit CCA7    Summary of actual construction costs.

Exhibit HP10    Photographs of subject house under construction.

Exhibit HP11    Photographs of subject house under construction.

Exhibit HP12    Photographs of subject house under construction.

Exhibit UI13    List of Unfinished items and estimates of expenses to finish.

Exhibit UP14    Photographs of unfinished areas.

Exhibit FS15    Picture of For Sale sign on post and copy of check for sale add in Lucky Dime News (dated 7/28/03).

Respondent=s Evidence

Respondent offered into evidence the testimony of Patrick L. Taylor, Missouri State Certified Residential Real Estate Appraiser. Mr. Taylor=s Appraisal Report (Exhibit 2) was received into evidence. Mr. Taylor arrived at an opinion of value for Complainant=s entire property of $260,000.

Ms. Maxwell testified in her own behalf. She also offered the testimony of Doris Johnson, Deputy Assessor.

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

2. The subject property is located at RR 4, Box 39-A, Walnut Grove, Missouri. It is identified by map parcel number 11-07-25-09.01. The property consists of 41.2 acres, more or less, 40.6 acres are agricultural graded land. The property is improved by a two-story brick and vinyl-sided house. The house has been under construction for two or more years and was in a partially finished condition as of January 1, 2003, and will not be completed on January 1, 2004.

3. Complainant did not challenge the value or grading of the 40.6 acres, nor the valuation of the agricultural improvements by the Assessor. The agricultural land and improvements were valued at $26,700, with an assessed value of $3,200. Complainant=s appeal was as to the value of the home and homesite.

3. There was evidence of new construction and improvement from January 1, 2003, to January 1, 2004, however, the evidence was not sufficient to establish how the new construction and improvement (further finishing of the interior of the house) would impact the fair market value of the subject as of January 1, 2004, under the economic conditions existing on January 1, 2003. Therefore, it is deemed that no change in the assessed value as of January 1, 2004, would be warranted due to the minimal amount of finish work apparently done during 2003.

4. Complainant=s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money for the subject property as of January 1, 2003, to be $200,000.

5. Complainant=s Exhibits A, B, A 1, SF 3, FR-71-5, CR 6, HH 8, HL 9, CCA 7, HP 10, HP 11, HP 12, UI 13, UP 14 and FS 15 were not probative on the issue of fair market value. Exhibit C was not probative on the issue of fair market value. Exhibits AP 4, 2 and STC 2 (included as a part of AP 4) were relevant to the issue of fair market value.

6. The evidence presented by Exhibit AP 4 and Exhibit 2 was substantial and persuasive to rebut the presumption of correct assessment by the Board and provide a basis for the calculation of fair market value of the subject house and homesite. The fair market value of the house and homesite as of January 1, 2003, is $185,000.

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.

Duty to Investigate

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).

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law. Hermel, Cupples-Hesse, Brooks, supra.

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); Reeves v. Snider, 115 S.W.3d 375 (Mo.App. S.D. 2003)

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).

The present case presents an excellent illustration of why a complainant is best served by permitting an assessor or assessor=s appraiser access to the property in dispute. In the present case, had Complainant permitted the assessor and the Board to conduct an interior inspection of the house, this case might well have been settled without an appeal to the Commission. Clearly, had Mr. Strader permitted Respondent=s Appraiser (Mr. Taylor) to view the property and conduct an interior inspection, then the appraiser would have been in a much better position to account for the general unfinished condition of the house.

Mr. Taylor cannot be faulted for alleged discrepancies in his appraisal when his failure to have adequate information on the unfinished condition was due to Mr. Strader=s unwillingness to permit an interior inspection. What Mr. Strader asserts to be mistakes in the Taylor appraisal are not there because of any deficiency in Mr. Taylor=s abilities as an appraiser. Any such shortcomings only exist because Mr. Taylor was not permitted to do his job, as Mr. Strader=s appraiser was. That is, Mr. Taylor was prevented by Complainant from conducting the type of inspection which would have provided the necessary visual information to verify the need for what possibly could be more appropriate adjustments.

Had an interior inspection been permitted, it would have been a very simple matter to verify the entirety of the unfinished condition of the subject home, as well as its use of used or recycled materials. The Hearing Officer is not concluding that Mr. Strader is not being truthful as to the general unfinished condition of his home. It would have been much better to have had Mr. Taylor been able to view for himself in person the interior condition of the subject house.

Mr. Strader has a very simple theory as to how his property should be valued. His opinion of value is based upon three elements. These three elements are his (1) cost to purchase his land about eight years before tax date, (2) his out of pocket costs for materials in his unfinished house, and (3) an allotment for his labor in constructing his house. These elements are valued by Mr. Strader at $50,000, $100,000 and $50,000 respectively.

Mr. Strader is really offering a variation of a cost approach to value his property. While the cost approach is a recognized approach to valuing property, it must be properly performed and must rest upon verified market data. This was not done in the case. Mr. Strader=s methodology does not comply with the generally accepted standards as to performing a proper cost approach.

In those instances where the owner=s opinion is not based upon proper elements and foundation, it has no probative value on the issue of fair market value. In this case, the modified cost approach presented by Mr. Strader does not constituted substantial and persuasive evidence. The methodology is not a recognized cost approach supported by market data. The opinion of value of $200,000 given by Mr. Strader can be given no weight in this instance.

The evidence relative to Mr. Strader=s attempts to sell the subject property are not persuasive to establish fair market value. Owner=s may always seek to sell property without making use of a professional real estate broker or agent. However, in the present case, the posting of a sign and occasionally taking out a small classified add in a weekly advertising sheet (The Lucky Dime), does not constitute reasonable and ordinary attempt to market the property. This is not adequate exposure to the market which in point of fact tests the marketability of the subject house in its existing condition, with the adjoining farm.

The Hearing Officer recognizes that the appraisal problem presented by this case is not an easy one. As discussed above, the problem was not simplified by the failure of Complainant to accord Mr. Taylor the same right of interior inspection and viewing of the house and homesite as was provided to Ms. Lynn. Due to the unusual living area of the subject and the unfinished condition, the Hearing Officer understands that certain challenges were presented to both appraisers, relative to obtaining adequate comparables.

Clearly, from the testimony of both appraiser=s homes of 6,000+ square feet are not common in Dade County on 40 acre farms. The Hearing Officer=s general knowledge of not only Dade, but its surrounding counties, is that an appraiser would be very hard pressed to locate a house the size of the subject on a 40 acre or even closely comparable acreage. Homes comparable to the living area of the subject would no doubt be found in various upscale subdivisions in and around Springfield, however, the adjustment for difference in land value would offset any benefit from using such comparables, as opposed to those selected by the two appraisers.

The matter of the subject being essentially a 2 year old unfinished structure presents a further degree of difficulty to this appraisal problem. The fact that the house is in an unfinished condition is verified by Ms. Lynn. However, it would have been far better to have had the benefit of both appraisers viewing the unfinished condition, than limiting that to just Complainant=s appraiser. Nevertheless, the Hearing Officer gives equal weight to the appraisals of Ms. Lynn and Mr. Taylor for purposes of arriving at a value for the subject homesite and house.

The Hearing Officer notes that neither appraiser approached the appraisal problem as one to determine the fair market value of the subject homesite and house, since just over 40 acres of the Complainant=s farm is valued according to state statutes and State Tax Commission rule by agricultural land grades. However, from the information provided in the respective appraisal reports it is possible to back out land values from each comparable and arrive at indicated values of the Complainant=s house and homesite. Complainant=s appraiser adjusted for difference in land area by an amount of $1,200 per acre. Respondent=s appraiser adjusted by an amount of $1,000. Therefore, the Hearing Officer will adjust each appraisal to extract the land value for the acreage that does not constitute part of a homesite. For this purpose and for simplification, a one acre homesite for each comparable will be assumed.

The methodology the Hearing Officer has applied to both the Lynn and Taylor appraisals is simply to reduce the sale price by an amount equal to the land value less one acre to account for the homesite. Then the adjustment to each sales comparable for difference in site size will be eliminated. For example, if a site adjustment of -$8,000 was made (Taylor Comp. 1), then $8,000 will be added back to the net adjustment to account for the fact that there is no need for a site adjustment.

In other words, by deducting the land value from the sales price, the remaining sales price will represent the value for a one acre homesite and the residential and agricultural improvements. Since both appraisers made adjustments for the difference in the agricultural amenities, no attempt will be made to further adjust for those factors. However, a final adjustment to value will be made to reflect that the valuation of the subject agricultural improvements was not challenged in this appeal.

The removal of the excess agricultural land and the correction of the appraisals to eliminate a site adjustment results in the following indicated values.