It took just three weeks for ValueAppeal founder Charlie Walsh to attract financing for his startup company. I guess that’s what happens when you offer a service that helps homeowners reduce their property taxes.
The 2-year-old company announced today that it has pulled in $1.6 million in new financing from existing investors, money that Walsh says will be used to add developers, bolster ties with strategic partners and market the service. It also plans a move to larger office space in Seattle to accommodate its growing team of 15 people.
Total funding now stands at about $3 million.
ValueAppeal’s story is not only resonating with investors. But homeowners across the country are using the online tool to question the assessed value of their homes.
ValueAppeal takes the pain out of appealing property taxes, with users able to see if they are eligible for a reduction within minutes. Walsh says that the service is operating at an 80 percent success rate, with the average customer saving $839.
You might think that ValueAppeal only resonates in a tough housing market where homeowners are attempting to extract every last bit of value out of their home. But Walsh said that’s a common misconception. In fact, markets which have been hit the hardest by the housing bust — like Maricopa County, Arizona — do not have a higher percentage of overassessed homes.
In Maricopa County, for example, Walsh said that the assessor properly lowered assessments to match the market prices. ValueAppeal’s technology can analyze those records, and, in that instance, decide to focus marketing efforts elsewhere.
“We’ve run our proprietary algorithm over the past several years of property assessment data nationwide and found that approximately 25 percent of homes are overassessed in each county each year, regardless of whether the housing market was trending up or down at the time,” Walsh tells GeekWire. “This is due to the flawed nature of the automated valuation models used to create the assessments in the first place.”
Since each home is unique, Walsh said that it is extremely difficult to do mass appraisals. ValueAppeal has found that some counties are as high as 50 percent overassessed, while others are as low as one percent.
King County — where Seattle is based — has been pretty good about properly assessing homes, said Walsh. (I am sure we’ll hear from some homeowners who beg to differ).
New property assessments for homes in the county are coming in the next few weeks, and Walsh is eager to see how the county performs.
ValueAppeal charges a one-time flat fee for its service, which counters the more expensive offerings from attorneys and tax consultants who typically charge homeowners 50 percent of their savings. (Given ValueAppeal’s average of $839 savings, that would equate to just of $400).
Furthermore, Walsh said that many tax assessment services will only “take your case” if your home is over a certain value.
“Since we have a flat $99 fee we can provide service to homeowners at all price points who never had anyone to turn to until we came along,” Walsh says.
Here’s a promotional video for the service in which the narrator notes: “The only thing worse than paying high property taxes is overpaying.” I am sure many will agree with that statement.