Section 50 IAC 27-11-2 - Sales chasingAuthority: IC 6-1.1-4-4.5; IC 6-1.1-31-1; IC 6-1.1-31-12
Affected: IC 6-1.1-4; IC 6-1.1-13; IC 6-1.1-14
Sec. 2.
(a) Sales chasing is the practice of adjusting the value on properties that sold without regard to the market analysis performed in setting values for the population. Sales chasing can occur on an individual basis or can occur systematically. First, on an individual basis, it may occur when individual sales are reviewed with focus on the assessed value to the sales price. In such a situation, the assessor changes characteristics of the property in order for the value to come in line with the sales price. Systematic sales chasing may occur if, when creating adjustments for the market, characteristics are over-stratified. The most common over-stratification is with the creation of neighborhoods.(b) A subtle, possibly inadvertent, variety of sales chasing occurs when the recorded property characteristics of sold properties are differentially changed relative to unsold properties. Then the application of a uniform valuation model to all properties results in the recently sold properties being more accurately appraised than the unsold ones.(c) Local assessors shall avoid the practice of sales chasing. The department shall monitor and discourage sales chasing because unless similar unsold parcels are reassessed at the same level as sold parcels, sales chasing causes inequitable treatment of taxpayers by shifting the tax burden to taxpayers who have recently bought property.(d) As long as sold and unsold parcels are assessed in the same manner and the data describing them are coded consistently, statistics calculated in a sales ratio study can be used to infer assessment performance for unsold parcels. However, if parcels that sell are selectively reassessed or recoded based on their sales prices or some other criterion, such as listing price, and if such parcels are in the ratio study, sales ratio study uniformity inferences will not be accurate (assessments will appear more uniform than they are).(e) Local assessors and the department are not required to employ all of the detection techniques described in Appendix E of the IAAO Standard on Ratio Studies (April 2013), but shall consider implementing at least one (1) procedure.(f) Once it is determined that sales chasing probably has occurred and probably is reducing the validity of ratio study statistical measures of level or uniformity, it is necessary for the assessor to redo the ratio study to establish valid measures before any other recommendations, such as reassessment in accordance with IC 6-1.1-4 or equalization action in IC 6-1.1-14, may be made.Department of Local Government Finance; 50 IAC 27-11-2; filed Apr 8, 2010, 1:45 p.m.: 20100505-IR-050090502FRAFiled 11/2/2020, 9:34 a.m.: 20201202-IR-050190636FRA