The opinion
IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
JACK YARBROUGH, )
)
Plaintiff, ) TC-MD 110322N
)
v. )
)
MARION COUNTY ASSESSOR, )
)
Defendant. ) DECISION
Plaintiff appeals the real market value of property identified as Account R28595 (subject
property) for the 2010-11 tax year. A trial was held on November 7, 2011, in the Tax
Courtroom, Salem, Oregon. William L. Ghiorso, Attorney at Law, appeared on behalf of
Plaintiff. Plaintiff testified on his own behalf. Rick Nasset (Nasset), licensed real estate broker,
also testified on behalf of Plaintiff. Glen White (White), property tax appraiser, appeared and
testified on behalf of Defendant. Nasset prepared a broker’s price opinion for the subject
property. However, the broker’s price opinion was not timely exchanged under Tax Court Rule-
Magistrate Division 10 C and was not received into evidence. Defendant’s Exhibits A through O
were offered and received without objection.
I. STATEMENT OF FACTS
The subject property is comprised of a manufactured home, several other structures
including a “loft barn” a “multi-purpose” building, four “lean-tos,” a “pump house,” and a
“detached garage,” onsite developments and landscaping on a 0.66-acre lot. (Def’s Ex A.)
Nasset testified that the age of the subject property manufactured home is 1998 and it is 1,296
square-feet. Nasset testified that he inspected the subject property and that he observed a small
deck off the back of the subject property. White described the subject property fence as “chain
DECISION TC-MD 110322N 1
link.” (See Def’s Ex A.) Nasset testified that the subject property gate and fence posts are of a
cyclone fence material, but that the actual fence is a “chicken wire mesh.” Plaintiff also testified
that the subject property fence is chicken wire. Nasset testified that the subject property is in the
middle of three parcels that are close together with a “shared driveway.” Nasset and Plaintiff
both testified that the subject property lot is a “flag lot.” White testified that he does not disagree
that the subject property shares a driveway with two other properties, but noted that this is
common in rural areas. He testified that he does not agree that the subject property lot is a “flag
lot.”
Plaintiff testified that he purchased the subject property in 2007 with a plan to develop
the 20 acres behind the subject property and use the subject property for access. He testified that
the only value of the subject property was as access to the 20 acres of land located behind it.
Plaintiff testified that he did not buy the subject property for its value as a rental property.
A. Plaintiff’s value evidence
Nasset testified that he has been a mortgage broker since 1994 and a licensed real estate
broker since 2002. He testified that he completed a broker’s price opinion for the subject
property and determined values for both the land and the manufactured home. Nasset testified
that he collected data from the regional multiple listing service using the parameters of size (0.4
to 1-acre parcels) and age (within 10 years, plus or minus, of the subject property).
1. Improvements’ value
Nasset testified that, as of the date of trial, there were 121 “active manufactured homes”
“of all sizes and ages” listed in regional multiple listing service. He testified that the regional
multiple listing service listings ranged from $4,000 to $114,900 with a median price of $28,900.
Nasset testified that, as of the date of trial, there were 188 sales in 2011 (year to date) with sale
DECISION TC-MD 110322N 2
prices ranging from $2,000 to $99,900 and a median price of $22,000. He testified that, in 2010,
there were 198 sales with a median price of $20,000; in 2009, there were 211 sales with a median
price of $23,000; in 2008, there were 223 sales with a median price of $25,000; and in 2007
there were 253 sales with a median price of $25,000. Nasset testified that demand declined
“significantly” from 2007 to 2011 based on the number of sales that occurred each year, but
median prices did not decline much over that period.
White testified that, for property tax valuation, property is “value in place.” He testified
that personal property manufactured homes are not “in place” and are not good comparable sales
for the subject property because they have to be transported to their eventual location. White
testified that there is typically a cost of at least $10,000 to place a manufactured home on land.
He testified that Nasset’s improvements’ value of $25,000 may be the value of a manufactured
home if it were to be moved, but that is not the value of the subject property manufactured home,
which is situated on land. Nasset testified in response that he researched manufactured homes
separate from land because he was not “tasked” to find manufactured homes situated on land.
2. Land value
Nasset testified that he determined land values ranging from $53,000 to $58,000, and
concluded a land value of $55,000. He testified that he identified three sales and three listings as
comparable to the subject property. Nasset testified that the lot sizes of the three sales and
listings ranged from 0.41 to 0.88 acres. He testified that his first sale was 0.41 acres that sold for
$75,000; it included a large garage, so he made a downward adjustment of $5,000 for an adjusted
sale price of $70,000. Nasset testified that his second sale was 0.44 acres in Lebanon, Oregon
(Linn County) that sold for $55,000; it did not include a well or septic, but it did include a large
DECISION TC-MD 110322N 3
shop, so he made a downward adjustment of $10,000.1 He testified that his third sale was 0.73
acres and located north of Mt. Angel; it sold for $65,000 and included a well and septic, so he
did not make any adjustments. Nasset testified that his comparable sales 1-3 occurred on
March 28, 2011, December 10, 2010, and March 17, 2011, respectively. Nasset testified that his
sales and listings were “recent” because that is what he was “tasked” to find. He testified that he
did not make any time adjustments because prices have gone both up and down. Nasset
conceded that the “current” listing prices are not reliable indicators of the value of the subject
property as of January 1, 2010.
Nasset testified that he considered only rural lots; city residential lots are not comparable
to the subject property because they typically have “water and sewer” rather than “well and
septic” like the subject property. He testified that “above-ground sand filter” septic systems are
required in the subject property area due to county zoning and environmental overlays. Nasset
testified that three of his six comparable sales and listings included well and septic and three did
not. He testified that, for the three without well and septic, he made an adjustment of $18,000
($8,000 for the well and $10,000 for septic). Nasset testified that he did not make size
adjustments because, within parameters of 0.4 to 1 acre, there is not much difference in value.
He testified that the subject property is a flag lot and that diminishes its value.
White testified that Nasset’s values of $8,000 for the well and $10,000 for septic are a
little low, but he does not dispute those values. He testified the value of onsite developments
such as power, telephone, excavation, trenching for utilities, and landscaping must all be
included in the land value of the subject property. Nasset testified in response that he did not
1
Nasset did not state any amount of upward adjustments made for septic or sewer; however, based upon his
testimony that an $18,000 adjustment for well & septic is appropriate, it can be concluded that an upward
adjustment of $18,000 for those features is required.
DECISION TC-MD 110322N 4
“work with” onsite developments, only land and improvements. He testified that he considered
the cost of well and septic, but not other onsite developments.
B. Defendant’s value evidence
White testified that he looked for comparable sales that would indicate the value of the
subject property as a whole. He identified five comparable sales that occurred between
March 17, 2009, and April 30, 2010, with prices ranging from $140,000 to $245,000.
(Def’s Ex D.) White’s sale 5 occurred on April 30, 2010, for $140,000; he testified that both the
lot and the improvement are smaller than the subject property and the location is inferior. (See
id.) White testified that sale 5 establishes the low end of the range of values. Sale 1 occurred on
March 17, 2009, for $186,000. (Id.) White testified that sale 1 is the best comparable sale for
the subject property; it is located closest to the subject property and includes a class 2+ house
that is older and no longer up to code. (See id.) He testified that four of his five comparable
sales involve “stick built” homes; only sale 3 involved a manufactured home. White testified
that “stick built” homes are the best comparable properties he could find given the parameters of
time, location, lot, and size. He testified that sale 3 is the most similar to the subject property in
some respects; it is almost identical in size and quality and it is six years older. (See Def’s Exs
D, H-1.) Sale 3 occurred on July 6, 2009, for $159,900. (Def’s Exs D, H-2) White testified that
the big difference between sale 3 and the subject property are the location and additional acreage.
(See Def’s Exs D, H-1.)
Nasset testified that he would prefer not to compare “stick built” homes to manufactured
homes; he would consider larger acreages before comparing the subject property to “stick built”
homes. Nasset testified that he agrees that White’s sale 1 is very comparable to the subject
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DECISION TC-MD 110322N 5
property with respect to location; it is affected by the same environmental overlays as the subject
property. He testified that White’s sale 3 involves an inferior lot.
White testified that, based on the Willamette Valley regional multiple listing service
“vacant land report,” the average price of lots less than one acre in size was $71,452 in
December 2009, and $72,037 in January 2010. (See Def’s Exs K, L.) He also provided a list of
seven land sales in Jefferson and Stayton from 2009 and 2010, with an average price of $61,814
and a median price of $53,000. (Def’s Ex M.) White testified that the closest land sales to the
subject property were a July 24, 2007, sale for $65,500 and a subsequent October 6, 2009,
distress sale of a 0.17-acre lot for $55,000. (See Def’s Exs N, O.) He testified that the subject
property land value of $77,800 is supported by his market research. (See Def’s Ex A.)
White testified that the value of the subject property onsite developments was reduced at
the board of property tax appeals (BOPTA) from $34,000 to $25,990. (See id.) White testified
that the subject property landscaping at the time of the 2007 listing included apple trees, shrubs,
a lawn, and a “fish pond.” (See Def’s Ex E.) He determined a value of $4,000 for the subject
property “yard improvements,” including “over 300 [square-feet] of deck [with] railing, over 200
[feet] of 3.5 [foot] chain link fence, [and a] concrete sidewalk.” (Def’s Ex A.) Plaintiff testified
that he disagreed with White’s value conclusions for the subject property onsite developments
and landscaping. He testified that the subject property includes an “outdated sewer system” with
a 250 gallon tank. Plaintiff testified that the subject property deck needs to be repaired; the fence
is not “chain link,” but rather “chicken wire”; the “concrete sidewalk” is about 50 years old and
“cracked”; and the apple trees are 50 to 60 years old and rotten.
White determined that several of the subject property improvements have no value,
including a “loft barn,” a “multi-purpose” building, three “lean-tos,” a “pump house,” and a
DECISION TC-MD 110322N 6
“detached garage.” (Def’s Ex A.) Plaintiff testified that those improvements actually have a
“negative value” because of the costs associated with demolition. He testified that demolition
will cost $25,000 to $33,000, including the cost of hauling away materials. White testified that
he disagrees with Plaintiff’s estimate of demolition costs, noting that Plaintiff could burn the
derelict buildings himself. Plaintiff testified that he disagrees that he can demolish any structures
by burning them; the Marion County Fire Department would not allow that.
The 2010-11 roll real market value determined by Defendant was $176,750. (Ptf’s
Compl at 2.) BOPTA reduced the 2010-11 real market value to $168,750, with the reduction
entirely in the land real market value. (Id.) BOPTA reduced the 2010-11 exception value from
$176,750 to $168,750 and reduced the 2010-11 maximum assessed value from $112,710 to
$107,610. (Id.) Plaintiff requests that the 2010-11 real market value be reduced to $75,000, with
$40,000 allocated to the land and $35,000 to the improvements. (Id. at 1.) Defendant requests
that the 2010-11 real market value be reduced from $168,740 to $149,320. (Def’s Ex A.)
II. ANALYSIS
The issue before the court is the real market value of the subject property for the 2010-11
tax year. “Real market value is the standard used throughout the ad valorem statutes except for
special assessments.” Richardson v. Clackamas County Assessor (Richardson), TC-MD No
020869D, WL 21263620 at *2 (Mar 26, 2003) (citing Gangle v. Dept. of Rev., 13 OTR 343, 345
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DECISION TC-MD 110322N 7
(1995)). Real market value is defined in ORS 308.205(1), which states:
“Real market value of all property, real and personal, means the amount in cash
that could reasonably be expected to be paid by an informed buyer to an informed
seller, each acting without compulsion in an arm’s length transaction occurring as
of the assessment date for the tax year.”2
The assessment date for the 2010-11 tax year was January 1, 2010. ORS 308.007; ORS 308.210.
“Real market value in all cases shall be determined by methods and procedures in
accordance with rules adopted by the Department of Revenue[.]” ORS 308.205(2). There are
three methods of valuation that are used to determine real market value: (1) the cost approach,
(2) the sales comparison approach, and (3) the income approach. Allen v. Dept of Rev., 17 OTR
248, 252 (2003). All three approaches must be considered, although all three approaches may
not be applicable to the valuation of the subject property. OAR 150-308.205-(A)(2)(a). The
approach of valuation to be used is a question of fact to be determined on the record. Pacific
Power & Light Co. v. Dept. of Rev., 286 Or 529, 533 (1979). Both parties considered the sales
comparison approach to be applicable. OAR 150-308.205-(A)(2)(c) states, in pertinent part:
“In utilizing the sales comparison approach only actual market transactions of
property comparable to the subject, or adjusted to be comparable, will be used.
All transactions utilized in the sales comparison approach must be verified to
ensure they reflect arms-length market transactions.”
“The court looks for arm’s-length sale transactions of property similar in size, quality, age and
location * * * in order to determine the [real market value]” of the subject property. Richardson,
WL 21263620 at *3.
Plaintiff has the burden of proof and must establish his case by a preponderance of the
evidence. ORS 305.427. A “[p]reponderance of the evidence means the greater weight of
evidence, the more convincing evidence.” Feves v. Dept. of Revenue, 4 OTR 302, 312 (1971).
2
All references to the Oregon Revised Statutes (ORS) and to the Oregon Administrative Rules (OAR) are
to 2009.
DECISION TC-MD 110322N 8
“[I]t is not enough for a taxpayer to criticize a county’s position. Taxpayers must provide
competent evidence of the [real market value] of their property.” Poddar v. Dept. of Rev.
(Poddar), 18 OTR 324, 332 (2005) (citing Woods v. Dept. of Rev., 16 OTR 56, 59 (2002)). “[I]f
the evidence is inconclusive or unpersuasive, the taxpayer will have failed to meet his burden of
proof.” Reed v. Dept. of Rev., 310 Or 260, 265, 798 P2d 235 (1990). “[T]he court has
jurisdiction to determine the real market value or correct valuation on the basis of the evidence
before the court, without regard to the values pleaded by the parties.” ORS 305.412.
Nasset testified on behalf of Plaintiff that he determined the value of the subject property
land and improvements separately. To value the subject property improvements, he identified
the median price of sales of manufactured homes in 2007, 2008, 2009, 2010, and 2011 year to
date, as of the date of trial. From that information, Nasset concluded a value of $25,000 for the
subject property improvements. The collection of raw data from the regional multiple listing
service over several years is not one of the recognized approaches of valuation under OAR 150-
308.205-(A)(2)(a). Furthermore, that information is not helpful in determining the value of the
subject property improvements because there is no way to determine which, if any, of the sales
included in Nasset’s data are comparable to the subject property. As noted by White, Nasset’s
data also fails to account for the value of the subject property improvements “in place” on the
land.
Nasset testified that he determined land values ranging from $53,000 to $58,000, and
concluded a land value of $55,000 for the subject property land. He testified that he identified
three land sales and three listings. Nasset testified that his land sales occurred in December 2010
and March 2011, but he did not make any adjustments for time. Based on Nasset’s testimony,
the land sales appear to be comparable to the subject property land with respect to lot size.
DECISION TC-MD 110322N 9
Nasset’s “adjusted” sale prices for his three land sales were $63,000,3 $65,000, and $70,000. He
testified that he did not consider the value of onsite developments, other than well and septic or
landscaping. It is not clear to the court how Nasset determined land values ranging from $53,000
to $58,000; those values conflict with the three land sales about which Nasset specifically
testified. Furthermore, Nasset’s land value evidence does not support Plaintiff’s requested land
value of $40,000; it is more supportive of Defendant’s land value.
Based on his inspection of the subject property and the comparable sales that he
identified, White determined a 2010-11 real market value of $149,320 for the subject property.
Plaintiff criticized White’s value conclusion based on the comparability of White’s sales (four of
White’s five comparable sales were “stick built” homes rather than manufactured homes) and
based on the value that White attributed to onsite developments and the “yard improvements.”
As stated in Poddar, “it is not enough for a taxpayer to criticize a county’s position. Taxpayers
must provide competent evidence of the [real market value] of their property.” 18 OTR at 332.
Plaintiff expressed his opinion concerning the poor condition of the onsite developments and the
“yard improvements,” but failed to offer any competent evidence concerning their value.
The court finds that Plaintiff failed to prove by a preponderance of the evidence that the
2010-11 real market value of the subject property was $75,000. Defendant presented persuasive
evidence in support of a 2010-11 real market value of $149,320. For the court to order a change
in real market value to the tax roll, Plaintiff must be aggrieved. ORS 305.275(1)(a). To be
aggrieved, the ordered change to the tax roll must result in a property tax reduction. The
3
Nasset testified that his second land sale price was $55,000 and he made a downward adjustment of
$10,000 because it included a large shop. He also testified that land sale 2 did not include well or septic. Based on
Nasset’s testimony that an adjustment of $18,000 is necessary for land that lacks well and septic, the court
determined an adjusted sale price of $63,000 for Nasset’s land sale 2.
DECISION TC-MD 110322N 10
2010-11 maximum assessed value of the subject property is $107,610,4 and the court did not
receive evidence as to whether a reduction in the 2010-11 real market value to $149,320 would
result in tax savings to Plaintiff.
III. CONCLUSION
After careful consideration of the testimony and evidence presented, the court finds that
the 2010-11 real market value of the subject property was $149,320. Now, therefore,
IT IS THE DECISION OF THIS COURT that the real market value of property
identified as Account R28595 was $149,320 for the 2010-11 tax year. The tax roll will be
adjusted only if Plaintiff is aggrieved.
Dated this day of January 2012.
ALLISON R. BOOMER
MAGISTRATE PRO TEMPORE
If you want to appeal this Decision, file a Complaint in the Regular Division of
the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;
or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
Your Complaint must be submitted within 60 days after the date of the Decision
or this Decision becomes final and cannot be changed.
This document was signed by Magistrate Pro Tempore Allison R. Boomer on
January 26, 2012. The Court filed and entered this document on January 26,
2012.
4
Plaintiff did not appeal the 2010-11 exception value or 2010-11 maximum assessed value.
DECISION TC-MD 110322N 11