Should My Tax Provider be Local?

EVERY prospective client I speak with always asks this question – and it’s a good one. It’s a question (and answer) that tax firms have been dodging or using to their advantage for as long as I have been doing this type of work.

For me, the answer is clear and as follows:

First, local presence doesn’t mean local expert. Just because you have hired a professional that lives down the street from one of your properties doesn’t mean they’re going to be your best option and most effective at mitigating your property’s real estate taxes. That’s like saying you only put LeBron James in your starting line up during home games. Ludicrous, right?

Second, given the access to an abundance of data, remote working, video conferencing, and effective technology applications, understanding a local market for real estate tax purposes doesn’t always require you to live there.

HOWEVER! Having a rapport with the jurisdiction and understanding that jurisdiction’s nuances is paramount. Knowing the assessors and decision makers in a jurisdiction will inevitably give you a better chance at facilitating a successful appeal. That of course does not always require you to live in or near that jurisdiction, but it does require effort both on the technical and personal side of the business.

Our team has worked successfully in more than 45 states throughout the country and more than 1,000 individual taxing jurisdictions. We obviously don’t reside in every jurisdiction and in many of those cases, we went where the work and clients took us. To be successful in that context, the process looks like this:

First, real estate assessments are an exercise in valuation, and if you understand how real estate is valued, not just from a real estate tax assessment perspective but also from a market valuation and investment perspective, then you are ready to make an effective case.

Second, if you are conversive in the primary approaches to real estate assessments across the United States (e.g. three primary approaches to valuation, mass appraisal, equalization, uniformity, unitary valuation, etc.) then you are still playing the same sport, just in a different stadium.

The overarching theme here is that as long as you are a local expert, it doesn’t matter where you live or where you have a physical office. It could certainly help, but only if you’ve followed the “know your audience” maxim. And frankly, by pigeon-holing yourself into only working with people that live down the street from your property, you are missing out on some exceptionally bright and effective advisors, not just at Cavalry but across the country as well.