TBO.com - Tampa Bay Online
Appraiser Evaluates Whether 303 Homes Are Overpriced
ADVERTISEMENT
Published: March 8, 2008
Related Links
TAMPA - South St. Petersburg homeowners living in neighborhoods with homes sold at inflated prices may no longer have to pay higher property taxes because of those transactions.
The Pinellas County Property Appraiser's Office is combing through each of 303 sales, first detailed in a Tampa Tribune investigation, and will likely disqualify them as comparable sales used to determine the value of nearby homes, said Ron Anderson, deputy for appraisals.
"If these sales tend to be inflated, then legitimate buyers shouldn't pay taxes based on those sales," Anderson said.
Anderson said his office first noticed what it considered strange sales early last summer, prior to the Tribune's report in July that outlined the transactions, all tied to a local businessman who ran a real estate investment program. Buyers told the Tribune they thought they had overpaid for the homes and that they overlooked peculiar financing that allowed third parties to collect large sums of cash at closings.
The Tribune reported this week that 65 percent of the sales have resulted in foreclosure filings and that the case was referred to the Florida Department of Law Enforcement.
Because the Pinellas County Property Appraiser's Office is assessing homes for tax purposes now, Anderson said it's time to re-evaluate affected homes. The office uses sales of nearby homes to estimate values. That estimate is used to determine property taxes.
"In our opinion, these sales were not arms-length transactions," Anderson said. "When we see atypical financing or that both buyer and seller didn't act in their own best interest, we're alarmed."
The investment program that arranged the sales was run by four companies owned by Tampa businessman Joseph F. Daniele. The Tribune's investigation found:
•Settlement documents indicate buyers consistently made $15,000 to $25,000 down payments, even though buyers said they did not bring any money to the table. Misrepresenting funding to lenders is against federal law.
•In 11 cases in which the Tribune obtained settlement documents, prices included $272,716 paid to companies Daniele operated. Daniele said the money was used for repairs, but a seller and some buyers disputed this.
•Most buyers said repairs weren't always made and work was shoddy, even though documents show Daniele's companies received thousands, as much as $35,010, for example, at one closing. Daniele said the money was to repay him for work before the sale.
•One lender confirmed to the Tribune that it received a sales contract with a higher sales price than the one turned in to a real estate broker. It is against federal law to withhold or misrepresent information that could influence a lender's decision to fund a loan.
Daniele's attorney could not be reached for comment. The attorney did not provide a comment after several requests were made last week to address the FDLE's inquiry. At the time of the Tribune's report in July, Daniele defended his business practices and blamed buyers for failing to manage their investment properties.
The decision not to use those sales could have a significant impact on the low-income neighborhood, said Frank Gregoire, a private appraiser.
"It's about time," said Gregoire, who is running for the office of Pinellas County property appraiser. "But the damage has already been done since homeowners won't get their money back."
The real estate boom spurred numerous deals with unusual financing and inflated sales prices, and neighborhoods throughout the Tampa Bay area have been affected, Gregoire said. County property appraisers need to do a better job at weeding out these peculiar deals, he said.
"Recorded documents don't always illustrate what went on during a sale, as we've learned here."
Rachel Dollar, a California lawyer who runs a Web site that tracks unusual mortgage deals, said Pinellas County's decision is "very uncommon" and that other municipalities should take note.
"The county is definitely doing the right thing," Dollar said.
Mark Smith, an appraiser who covers south St. Petersburg for the Pinellas County Property Appraiser's Office, said he has noticed that several of the companies owned by Daniele purchased property at either very low or very high prices.
"This happens every three to four years in this neighborhood," he said. "Some new guy comes in with sales like these, and there's a big fallout. It really does skew other sales in the neighborhood."
Reporter Shannon Behnken can be reached at sbehnken@tampatrib.com or (813) 259-7804.
TBO.com - Tampa Bay Online Member Agreement | Privacy Statement | Work With Us
Post a comment
(Requires free registration.)
* Keep it clean
* Respect others
* Don't hate
* Don't use language you wouldn't use with your mom
* Use "Report Inappropriate Comments" link when necessary
* See Member Agreement for details