February 6, 2015
Most people are paying too much in property taxes. For homeowners, mortgages and property taxes often make up a large portion of annual expenses. Before making the decision to buy real estate, it's important that prospective buyers take both things into consideration before going all in on making a purchase. While mortgage rates differ for everyone, property taxes are often a fixed percentage of the total assessment of a property's worth – so, for instance, if local property taxes are 1 percent and your property is assessed at $250,000, then you'd owe $5,000 in property taxes to your local government. The problem, though, according to TurboAppeal COO and cofounder John Guidos, is that roughly 70 percent of all properties in the country are over-assessed, which translates into millions of dollars paid every year towards property taxes that otherwise could have been money saved if people actually appealed their property assessments.
“Only about 10 percent of the population is actually doing anything about [their property taxes] or even know that they can do anything about them,” said Guidos. “But even then, historically, homeowners hire an attorney to do these property tax appeals for them…but it s a paper-driven, monotonous process that can take some time.”
According to a 2014 WalletHub analysis of the best states for taxpayers in the country, the state of Illinois came in at 47th place – yes, 47 out of the 50 states. To determine these rankings, the company looked at nine different types of taxes: real estate, state and local income, vehicle property, vehicle sales, sales and use, fuel, alcohol, food, and telecom. It's a good set of rankings – enlightening, but also absolutely necessary for anyone considering to relocate to another state. Particularly for aspiring homeowners who manage to find their “dream home” in another state, keeping an eye on state taxes (especially: property taxes) is essential for determining whether you can truly afford to buy that real estate. And if the issue does come down to property taxes, current and prospective homeowners need to know that property assessments can be appealed, and could save them thousands of dollars every year.
TurboAppeal Simplifies the Property Tax Appeal Process
TurboAppeal is a Chicago, IL-based startup that helps people with property tax appeals. Utilizing the power of Big Data, analytics, and data mining, the company streamlines the appeal process, making it significantly easier to appeal your property assessment. Guidos – an attorney who's had past experiences working through the property tax appeals process – believes that by greatly simplifying it, the option to appeal a property assessment becomes available to more people; currently, most people either don't know appealing is an option or don't know how to go about it.
Rather than having to deal with a lawyer (or, God forbid, having to sort through the paperwork on their own), homeowners simply have to visit the TurboAppeal website, click on the sign-up form, and then enter some very basic information, including: their name, the address of their property, their email address, and a phone number. And that's it! There's no need to fill out a 30- to 40-question questionnaire; rather, TurboAppeal formulates a property tax assessment appeal using Big Data and analytics. Users only pay TurboAppeal if the company is successful in appealing, and the cost amounts to 30 percent of whatever homeowners are saving in the first year as a result of the appeal; this means that if the company has saved you $1,000 in annual property taxes, it receives just $300 – it doesn't get an additional $300 per every following year that you save that $1,000.
TurboAppeal also offers property tax appeals services for real estate professionals, supporting them in their efforts to sell homes, working through post-transactions, or underwriting a loan.
TurboAppeal's Remarkable Progress
While TurboAppeal didn't begin full-time operations until this year, the company has already raised between $1 million and $1.5 million in funding – and that was done without the intention of raising; all they did was merely go around sharing their concept and hoping to gain validation – and they managed to pick up a lot of support along the way. Their lead investor is @properties – the largest real estate brokerage firm in Illinois – which puts them in a great position to scale TurboAppeal. The company is currently only offering their property tax appeal product in Illinois's Cook County, but Guidos notes that they plan to be in nine other counties by the end of the year.
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