Improve Your Mobile Home Valuations

Industry: State Government
Location: Helena, Montana
Population: 1,023,579
Tyler Client Since: 1988
Properties on 2015 Assessment Roll: Approximately 1 million across the state
Tyler Products Used: Orion^™, CLT Appraisal Services^™

The Facts

Located in Helena, Montana, the Montana Department of Revenue (DOR) is responsible for ensuring the uniform valuation of all taxable property in each of the 56 counties in the state. The DOR has one field office in each county and relies on the statewide implementation of Tyler’s Orion^™ computerassisted mass appraisal (CAMA) software solution to value all property types, including residential, commercial/industrial, personal property, agricultural land and mobile homes.

Faced with challenges from its existing practices, the DOR determined that field offices and taxpayers would benefit from valuing certain property types using both cost modeling and market modeling. Because they had the necessary sales data for strict personal mobile homes, they added market models specifically on those properties. The use of Orion made it exceptionally easy and efficient for the DOR to deploy multiple in-software modeling in its appraisal operations across the state. Their proactive efforts for meeting assessing and taxpayer needs earned them 2015 Tyler Excellence Award honorable mention.

Key Challenges

• Using cost models to value mobile homes could, at times, prove to be a somewhat complicated method to explain to taxpayers if they relied on large economic condition factors.
• Using actual market data typically results in improved valuation accuracy. Because the DOR was using cost models, which do not rely on actual market data, there was room for improved valuation accuracy.

Benefits of Market Modeling in Orion

• Appraisers had increased confidence in the valuations of strict personal mobile homes once they were able to value them using the market modeling method in Orion.
• Taxpayers clearly understood how their homes were valued using the market method, which established trust and confidence in the DOR.
• Office staff benefited from new and improved models and processes without disruption to everyday tasks because of a seamless implementation process.

The Challenge

Montana statute considers mobile homes as personal property instead of real property like conventional homes. For valuation purposes, mobile homes fall under one of two types. The first is strict personal mobile homes — the mobile home and the property it sits on are owned by different people. The second is attached real mobile homes — the home and property it sits on has a single owner. The Montana Department of Revenue had historically used only the cost method to determine value on both types of mobile homes.

Because of the calculations needed in the cost method, appraiser confidence and valuation accuracy had room for improvement. This was particularly evident when valuing strict personal mobile homes. The cost method required appraisers to establish the cost of the mobile home, calibrate figures and apply economic condition factors so the value would reflect the local market. The values determined using the cost approach are adjusted to the market using economic condition factors calculations. Because of this, appraisers wanted a better, more accurate way to determine value.

While calibrating cost values to reflect the local market was an accepted and highly used valuation method, the DOR decided to evaluate alternate methods. They concluded that the market method (also known as sales method) for valuing mobile homes would prove a more accurate way to establish value. The market method reflected actual sales and provided a good measure of what the market was doing at the time.

The market modeling process was more accurate and easier to understand. The state had the sales data needed to establish market models for strict personal mobile homes, so the DOR decided to build special market models in Orion to value these property types in addition to using the cost method.

In-Software Modeling in Three Easy Steps

Deploying other modeling methods within Orion required minimal additional programming and implementation. It involved three easy steps, and the DOR was in complete control of the timing and output.

The first step in using market models was verifying that the DOR had clean sales, market and neighborhood data. Once DOR staff was able to ensure data integrity, the second step required Tyler experts to create and implement calculations. The county’s model marketing team then set up and calibrated the market models for the third and final step, which included moving into a test environment before going live.

The test environment allowed the DOR to perform extensive testing on the models to ensure they would produce accurate results without risking the data in the live production environment. After several months of testing, initial results were so positive that it was determined to push the market models live. Appraisers used the new models for valuing strict personal mobile homes for the 2015 appraisal cycle.

By valuing strict personal mobile homes using the new market models in addition to the cost models in Orion, appraisers had complete credence in their property valuations. Appraisers had increased confidence in their work, and the values were more accurate than before. Because valuations are more accurate using market models, the DOR is expecting the number of appeals to decrease. This will save the county time and, most importantly, will increase understanding among property owners and facilitate trust between the DOR and its constituents.

While still in its early stages, valuing strict personal mobile homes using market models in Orion has had positive results, and indications are that those positive results will continue to grow beyond 2015.

Because implementation was so easy and successful, the DOR is looking to implement market models for attached real mobile homes in the near future. This would allow them to see increased confidence and other benefits after following a seamless and easy three step implementation process — a change most definitely worth the benefit.

Why Tyler?

• Tyler has more than 75 years of experience in the appraisal and tax software and services industry.
• Tyler’s leading Appraisal & Tax Solutions provide clients with tremendous flexibility and functionality, such as in-software modeling.
• Tyler provides a large array of ongoing support options.